1099-NEC issued to my name instead of LLC - payer refuses to issue correction

I'm in a frustrating situation with my delivery gig work. I established an LLC (partnership with 2 members) last year, and all my income from UberEats and Instacart went to that business throughout 2023. But when tax season rolled around, both companies issued 1099-NECs to me personally instead of to my LLC. UberEats was quick to fix the problem when I contacted them - they issued a corrected 1099-NEC with my business name and EIN within days. But Instacart is being a complete pain about it. I've called them three times, and they flat out told me they will NOT issue a correction. The customer service rep actually laughed and said "that's your problem, not ours." This is creating all kinds of accounting headaches for me. I have no idea how to properly file my business and personal taxes when I have a 1099-NEC going to the wrong entity. Our LLC is set up as a partnership with two equal members, so this incorrect 1099 is really complicating things. Has anyone dealt with this issue before? How do I handle this on my Schedule C and partnership return when one company refuses to correct their mistake?

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18 comments

Ava Martinez

•8M

This is a frustrating but not uncommon situation. The good news is you can still file correctly without Instacart issuing a new 1099-NEC. On your personal tax return (Form 1040), you'll need to report the 1099-NEC income on Schedule C, but then subtract the same amount as "income reported elsewhere" with a note that this income belongs to your partnership. This effectively zeroes out the income on your personal return. On your partnership return (Form 1065), include the full amount from the incorrect 1099-NEC as partnership income. Attach a statement to both returns explaining that the 1099-NEC was incorrectly issued to you personally rather than to the partnership, and that Instacart refused to issue a correction. The key is making sure the income is only taxed once (at the partnership level) while still accounting for the 1099-NEC that the IRS received with your SSN on it.

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Ava Martinez

•8M

You're right to be concerned about a potential matching notice. That's exactly why you need to report it on Schedule C first and then back it out with an offsetting entry. This creates a paper trail showing you didn't ignore the 1099. Regarding self-employment taxes, since the income is properly reported on the partnership return, each partner will receive their share of self-employment income on their Schedule K-1. You'll pay self-employment taxes based on the K-1 amounts, not on the incorrectly issued 1099-NEC.

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Zainab Abdulrahman

•8M

After struggling with almost the EXACT same situation (DoorDash issued correct 1099, GrubHub refused), I found this amazing tool called taxr.ai (https://taxr.ai) that helped me document everything properly. I scanned both the incorrect 1099-NEC and my LLC formation documents, and it generated a perfect explanation statement to attach to both my personal and partnership returns. The statement clearly explained why I was reporting the income on my 1065 instead of my 1040, and referenced the specific IRS regulations that allowed this treatment. It even created a special worksheet showing the income offset on Schedule C. Saved me from paying my accountant for an extra 2 hours of work figuring this out!

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Zainab Abdulrahman

•8M

It actually does handle S-Corps too! It asks you a series of questions about your business structure and then applies the relevant rules. My partner used it for her S-Corp when she had a similar issue with misreported royalty income. As for the regulations, it uses the actual IRS code and publications to create the statement. What impressed me was that it specifically cited Revenue Ruling 85-187 and Publication 583 which directly address income reporting for incorrect 1099s. The statements it generates look like what a tax professional would create - it's not just making stuff up.

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Yara Elias

•8M

I just wanted to update everyone. I was really skeptical about taxr.ai but decided to give it a try since my tax situation was such a mess with those incorrect 1099-NECs. Wow, I'm honestly impressed! The tool generated a perfect explanation statement that cited all the relevant IRS rules. My CPA was actually impressed with how thorough it was and said it would definitely prevent any issues with the IRS. The statement clearly explained why I was reporting the income on my 1065 instead of Schedule C, and included references to the specific regulations. It even created a worksheet showing the income offset. Definitely saved me hundreds in accounting fees since my CPA didn't have to research and create these documents from scratch.

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QuantumQuasar

•8M

After dealing with this EXACT problem for years (delivery apps are notorious for this), I finally found a solution for getting the IRS to actually help. I spent weeks trying to get through to the IRS Business Tax line to get formal guidance on how to handle incorrect 1099s, but it was impossible to reach a human. Then I discovered Claimyr (https://claimyr.com). They have this service that gets you through to an actual IRS agent, usually within 15 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c. I was connected to a really helpful business tax specialist who confirmed exactly how to handle the mismatched 1099s and explained what documentation I needed to avoid problems. The agent even put notes in my file about the situation so if there was ever a question about why the 1099 income wasn't on my personal return, there would be a record of their guidance.

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QuantumQuasar

•8M

It's actually pretty straightforward - they use an automated system that navigates the IRS phone tree and waits on hold for you. When an agent answers, you get a call connecting you to them. It's not "cutting the line" - you're still in the same queue as everyone else, but their system is doing the waiting instead of you. They claim it works because their system can call repeatedly using optimized timing based on IRS staffing patterns. I honestly don't know all the technical details, but I can tell you I was connected to an actual IRS business tax specialist within about 20 minutes, after trying for weeks on my own with no success.

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Paolo Moretti

•8M

OK I need to apologize for my skepticism about Claimyr. After struggling with this incorrect 1099 issue for weeks and getting nowhere with the IRS on my own, I decided to try it out of desperation. I'm seriously shocked - it actually worked! Got connected to an IRS business tax agent in about 25 minutes. The agent confirmed exactly what others here have said: report the income on Schedule C then offset it with an adjustment, include it properly on the partnership return, and attach explanation statements to both returns. The agent even gave me specific wording to use in my explanation statement and recommended I keep documentation showing my attempts to get the 1099 corrected. This was HUGE for my peace of mind since I now have official guidance directly from the IRS.

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Amina Diop

•8M

TurboTax isn't great at handling this specific situation. In TurboTax Business, you'll need to manually enter the 1099-NEC income as "income not reported on a 1099" since you technically don't have a 1099-NEC issued to the LLC. For your personal TurboTax return, you'll need to enter the 1099-NEC, but then add a negative "Other income" line on Schedule C with a description like "Income reported on Partnership Form 1065" to offset it. Make sure to include an explanation statement with both returns. If you're doing this more than one year, I'd honestly recommend switching to TaxAct or even paying a professional to use Lacerte, as they have specific workflows for this exact scenario.

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