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Discussion Starter · #1 · (Edited)
Doing work on a customers residential house .They right the check from their business account that has nothing to do with house.

Do you accept the check?
Does it even matter?
 

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Discussion Starter · #5 ·
Income is income. It all gets taxed the same
Understood but mixing business expense with personal can get messy for the customer. If the customer gets audited ,will the contractor be just as guilty by accepting a 1099 vs just claiming misc income .
 

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Agreed with everyone. Not your problem as long as you report it. Let them worry about their own finances.

I've had a lot of people that have businesses they run from home. If I'm doing work on their house they'll often use the business account to pay me as I guess it's a right off for them if they can say it's to improve the space that they meet with clients in.
 

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I'm in the ain't my problem camp. Check clears is all I care. If they 1099 me, I'll hand the paperwork to my accountant because I've claimed the income.
 

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A. call a Tax/Criminal lawyer, your are going to need them, Your client already commited a crime, income tax fraud, aiding and abetting? Wire fraud? is the check drawn out of state, definately a federal crime in and of itself.

What if the business has partners/stockholders, you are now helping your client steal from them.... Guido might have a piece of this "money"

It "might" be legal if the bizz is a sole propritorship.....Still very poor separation of funds... definately fraud if the 1099 turns up as paid by the individual instead of the business.

The Why, your client is having some buyers remorse/ sticker shock, she/he thinking let us nail Uncle Sam, SSi and medicare, and the tax monster of Illinios for 40 to 50% of the bill.

P.S. Anyone here can get 10 % of the amount unpaid by turning U and your customer in to IRS/ Illinois revenue.....
Call your C.P.A. and have them work you through an understanding of the law, This is lose your house serious, Can your books take an audit?

What is funny even if the HO gets "away" with it, now they can't claim the improvements as part of their 500,000.00 homeowners exemption when they retire, and of course the smaller SSI checks caused by under reporting one's self employment income.....
 

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A. call a Tax/Criminal lawyer, your are going to need them, Your client already commited a crime, income tax fraud, aiding and abetting? Wire fraud? is the check drawn out of state, definately a federal crime in and of itself.

What if the business has partners/stockholders, you are now helping your client steal from them.... Guido might have a piece of this "money"

The Why, your client is having some buyers remorse/ sticker shock, she/he thinking let us nail Uncle Sam, SSi and medicare, and the tax monster of Illinios for 40 to 50% of the bill.

P.S. Anyone here can get 10 % of the amount unpaid by turning U and your customer in to IRS/ Illinois revenue.....
Call your C.P.A. and have them work you through an understanding of the law, This is lose your house serious, Can your books take an audit?
What? :rolleyes:
 

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Not sure about the rest of the USA, but here in CT. If I work for a business, management firm, or in a property that is rented. Then I need to collect sales tax.

As it was explained to me. "you will get alot of time to pay the IRS, but if you mess up on sales tax returns, its a really big deal."

So if you paint Joe Lawyers house, and then he pays you with a company check and says you painted his office. You should either report it, or collect and remit sales tax. Or just blow it off cash the check and hope no one comes knocking......Because by that time it will be his word against yours...
 

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In Iowa, just repairs are required to pay sales taxes, new construction, or remodels, no, very few repairs, lots of remodels....
Painting and papering pay sales taxes on existing buildings.
 

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A. call a Tax/Criminal lawyer, your are going to need them, Your client already commited a crime, income tax fraud, aiding and abetting? Wire fraud? is the check drawn out of state, definately a federal crime in and of itself.

What if the business has partners/stockholders, you are now helping your client steal from them.... Guido might have a piece of this "money"

It "might" be legal if the bizz is a sole propritorship.....Still very poor separation of funds... definately fraud if the 1099 turns up as paid by the individual instead of the business.

The Why, your client is having some buyers remorse/ sticker shock, she/he thinking let us nail Uncle Sam, SSi and medicare, and the tax monster of Illinios for 40 to 50% of the bill.

P.S. Anyone here can get 10 % of the amount unpaid by turning U and your customer in to IRS/ Illinois revenue.....
Call your C.P.A. and have them work you through an understanding of the law, This is lose your house serious, Can your books take an audit?

What is funny even if the HO gets "away" with it, now they can't claim the improvements as part of their 500,000.00 homeowners exemption when they retire, and of course the smaller SSI checks caused by under reporting one's self employment income.....
That's ridiculous. How do you know any fraud is going on? What an individuals business pays for or doesn't is their business (pun intended). Huge leap
 

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That's ridiculous. How do you know any fraud is going on? What an individuals business pays for or doesn't is their business (pun intended). Huge leap
Thanks dom-mas! You saved me from a long response that may have gotten me banned. Instead of ridiculous, I was thinking moronic :laughing:
 

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Dom mas, You hire me to work on your personal house, you signed the work order with your personal name, not DM's business, or D/B/A?

If your a sole proprieter, and you claim the cost of the work as salary okay. confusing but legal. In that case, two 1099s need to be sent by the you, one to yourself (so all your income and self employement taxes are paid on the funds used on the home.) and the one to the Contractor.


If Incorprorated, good chance of losing the incorporation if discovered.

The 10 % snitch money been the law since the Civil War...

How can work on his residence be a legitiment business expense, all Home office work? You are laundrying his pre tax business income- at the least charge for your exposure to prision and fines, 5% and up according to HollyWood :smile:

IRS pub. # 334, page 39-40 "expenses You can't deduct:... Personal, living, and family expenses. ....Repairs that add to the value of your property or significantly increases its life.
IRS part 9 Criminal Investigation Chapter 5.
Investigative Process Section 5.
Money Laundering & Currency Crimes
9.55.2.1.5.5 (08-27-2007) Definition of :To Conceal or Disguise or Intent to Engage in Conduct: B.....even where the tax year has not yet concluded and the tax return has not yet been filed.....
C.... i.e. the statute can apply to a person who intends to assist another person in violating the Tax laws.

As a practical matter, the State or feds just match SSN on the real estate to property tax, building permits and tax returns = audit.

The only thing sadder than someone breaking the law to avoid taxes is doing it out of ignorance.
If someone tells me I might be committing a crime, I check it out with a competant expert, I don't poll Internet Gurus except for entertainment mostly.... Though, once in awhile there is a 2 carat diamond stuck in the wall of the Internet's Colon.
 

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C.... i.e. the statute can apply to a person who intends to assist another person in violating the Tax laws.

Accepting a business check is not INTENT to assist. How the business entity does it's book keeping is not a contractors problem. This is really an accounting issue that responsibility lies upon the entity issuing the check.
Who's to say it wasn't a bonus, being accounted for as "pay" or owners equity/Draw.
Not much different than accepting cash - Who knows what account that came from. Much greater chance of "dirty money" there tho. Bars and other 'cash' businesses pay in cash all the time. Reality being, could have been run through the "till" (accounted for) or not. Accepting cash payments like that is not "intent to assit".

As a contractor payment is payment. That payment goes into the books as income, how the other parties involved do the accounting-is their business... Not mine. AKA no conscious knowledge to assist anyone in wrong doing, as I have no idea how they do the books. Nor are we accountants that can professionally consult or advise on those matters.

But if you don't feel comfortable accepting a check from the business, don't accept it. They can transfer funds and write a personal check.
 
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