Thanks for the detailed explanation! Do you recommend any specific language to use when pushing back on this with the tax director? And also - is there any downside to the corporation if they receive an unnecessary 1099? Like, will they get flagged for an audit or anything?

I would approach it from an efficiency and accuracy standpoint: "I've researched the IRS requirements for 1099-NEC filing and found that issuing these forms to corporations is specifically exempted in the instructions. I'm concerned this approach might raise red flags with the IRS since our reporting will be inconsistent with their expectations, and it's creating significant additional work that isn't required by law. I've prepared a summary of the official guidelines if you'd like to review them." Regarding downsides for corporations receiving unnecessary 1099s - while it won't automatically trigger an audit, it can create reconciliation headaches for them. Their tax department will need to make sure the reported income matches their own records, and they might need to explain the discrepancy to their own accountants or auditors. In some cases, systems that automatically process 1099 data might misclassify the income. It mainly creates administrative hassle and confusion rather than legal problems.

Yes, the IRS has the Taxpayer Identification Number (TIN) Matching Program, but it's only available if you're required to file certain information returns like 1099s. You need to register for the IRS e-services and apply specifically for TIN Matching access. It doesn't directly tell you if a company is incorporated, but it does verify that the name and TIN combination is valid. The better approach is to have all vendors complete a W-9 form which requires them to indicate their entity type. That's your documentation showing why you did or didn't issue a 1099. If a vendor indicates they're a corporation on the W-9, you generally don't need to issue a 1099-NEC (with those few exceptions others mentioned).

I appreciate the tip! Unfortunately I used TurboTax and did it myself online, but I'm still trying to figure out their system to download old returns. Their website navigation is not very intuitive. Do you know if online services like TurboTax have the same 3-year retention policy?

Online services like TurboTax typically store your returns for even longer than 3 years - many keep them for 7+ years. The challenge is usually navigating their interface to find them. For TurboTax specifically, after logging in, click on your name in the top right corner, then "Tax Returns & Documents." From that screen, you should see all your past returns with a "Download/Print PDF" option. If you're still having trouble, their customer support can guide you through it - they're pretty responsive if you use their chat feature.

This is seriously good advice! My son had the same issue with a German university, and when he called them directly, they told him the transcript plus his W-2s would be sufficient. Saved weeks of stress and waiting.

Wait, I thought QIP only applies to interior improvements of nonresidential property? This is a residential rental building with exterior work.

You're absolutely right - I missed that this was a residential rental property. QIP only applies to interior improvements of nonresidential real property, so it wouldn't apply here. This would just be a standard capital improvement depreciated over 27.5 years as residential rental property. If you can establish the coating itself as a separate building component with a determinable useful life (based on manufacturer specs), you might be able to use a shorter recovery period. But it wouldn't qualify for QIP treatment.

Interesting point, but I don't think it applies here. Routine maintenance is about keeping the property in efficient operating condition, not extending its useful life. Since OP specifically stated this coating extends the life of the roof, it's a betterment, not routine maintenance.

What kind of deductions did you miss? I'm self-employed too and worried I might be overpaying.

The biggest ones I missed were home office deductions (I was afraid of an audit so I skipped it entirely), health insurance premiums (which are deductible for self-employed people), and retirement plan contributions. I also hadn't properly calculated my business mileage. The CPA also helped me properly categorize some expenses I had lumped together as "miscellaneous" which gave me more legitimate deductions. Even things like a portion of cell phone bills and internet costs can be deductible if you use them for business.

Yes, but there are very specific rules. Tax debts can potentially be discharged in Chapter 7 bankruptcy if they meet ALL these conditions: - The taxes are income taxes (not payroll or fraud penalties) - The debt is at least 3 years old (from the due date) - You filed your tax return at least 2 years before filing bankruptcy - The IRS assessed the tax at least 240 days before filing bankruptcy - You didn't commit fraud or willful evasion For 2022 taxes, you wouldn't meet the 3-year rule yet, so bankruptcy wouldn't help with this specific debt until at least 2026. Also, bankruptcy has serious long-term consequences for your credit and financial future.

Would this documentation help reduce any tax liability though? Or is it just to explain the unusual situation if questioned?

It's primarily to explain the unusual situation if questioned during an audit. The documentation itself won't reduce your tax liability, as the property will still be treated as a non-primary residence for capital gains purposes. However, having this documentation ready could prevent potential complications if the IRS questions why you owned a property that wasn't your primary residence but also wasn't generating rental income. Without proper explanation, they might incorrectly assume it was an unreported rental property, which could trigger a more extensive audit.

Good point! In California we have totally different rules for property tax reassessments when property transfers between family members. The fed and state systems barely talk to each other.