NOTE - Filing a
form 1099 on behalf of an independent contractor is important as, should
the IRS challenge the classification (independent contractor vs.
employee) and prevail, you will not be subject to certain penalties
if in fact a 1099 form has been filed consistently on behalf of the
independent contractor. In addition to assessing a failure to
file penalty (which can be significant) per form 1099 required to be
filed, the IRS can subject the payment to back up withholding and
assess the payer (assuming that the payer
does not have a properly completed and signed form W-9 on behalf of
the recipient). The filing of a properly completed form 1099
alleviates this issue.
Should you have any
questions please contact us.