Do I need to have a 1099-NEC voided for my dissolved S corp?

I've run into a weird situation with my 1099-NECs this year. I'm a self-employed contractor and the company I work for uses some third-party payment processor. Back in 2019, I closed down my S corporation and started working as just myself (sole proprietor) using my personal name and social security number. Since that switch, I've been receiving my 1099-NEC forms correctly each year under my personal info. But this year, I got TWO 1099-NECs. The first one has my correct name and SS#, but the amount is totally wrong. The second one is even weirder - it's issued to my old S corp (which hasn't existed for years!) with its TIN, and it shows an amount even though no work was done through the corporation. I contacted the payment processor about this mess, and they sent me a corrected 1099-NEC with my personal info and the right payment amount. But they didn't say anything about voiding the incorrect 1099-NEC that was issued to my dissolved S corp. They seem to think that just fixing the one under my name takes care of everything. Shouldn't they also void the 1099-NEC that was filed under my old S corp's name and TIN? I'm worried this could cause problems when I file my taxes. Any advice on what I should do here?

0 coins

18 comments

James Johnson

•8M

You're right to be concerned about this. When a company issues a 1099-NEC, they also submit that information to the IRS. So right now, the IRS has received information that your dissolved S corporation received income this year, which could potentially trigger questions or issues down the road. The payment processor should definitely void or correct the erroneous 1099-NEC that was issued to your S corporation. Since the S corp is dissolved and received no income, having an incorrect 1099-NEC floating around with its TIN could create a tax filing expectation that shouldn't exist. I would contact the payment processor again and specifically request that they void the incorrect S corporation 1099-NEC. Explain that simply correcting your personal 1099-NEC doesn't address the fact that they've reported phantom income to a dissolved entity.

0 coins

James Johnson

•8M

When you contact them, be very specific about the issue. Say something like: "You've issued a 1099-NEC to my dissolved S corporation (provide the name and TIN) reporting income that was never earned. This incorrect filing needs to be voided with the IRS, not just corrected on my personal 1099-NEC. Please confirm that you will be filing a corrected/voided 1099-NEC for the S corporation to notify the IRS that no income was actually paid to this entity." If they still don't understand, ask to speak with their tax department specifically, not just general customer service. Sometimes the front-line support staff aren't familiar with the implications of tax documents.

0 coins

Sophia Rodriguez

•8M

Just went through something similar with my taxes. The tool that saved me was https://taxr.ai - they have this feature where you can upload all your tax docs and it flags inconsistencies like this. After uploading both my incorrect and corrected 1099s, it highlighted exactly what needed fixing and gave me the specific language to use with the payment processor. The system spotted right away that having an active 1099 for a dissolved entity was going to cause problems and gave me a step-by-step walkthrough for resolving it. Saved me so much stress trying to figure out what to do.

0 coins

Sophia Rodriguez

•8M

You just take pictures of your tax documents with your phone or upload PDFs if you have them digitally. It uses some kind of AI to read all the information and check for problems or inconsistencies. It's super easy even if you're not tech-savvy. For W2 issues like yours, it would definitely help identify what's wrong and give you the exact steps to fix it. It not only points out the problems but gives you specific instructions tailored to your situation. As for privacy, they use bank-level encryption and don't store your documents after analysis. I was concerned about that too, but they have a whole security explanation on their site that put my mind at ease.

0 coins

Mia Green

•8M

Just wanted to update that I tried https://taxr.ai after seeing the recommendation here. Uploaded both my incorrect W2 and my correct one, and it immediately flagged the issue AND gave me a template email to send to my former employer. Got a response within 2 days saying they're sending a corrected W2 to the IRS. I was honestly surprised it worked so well. The system also identified a potential deduction I was missing related to my job change that might save me around $800. Definitely worth checking out if you're dealing with tax document issues like this 1099-NEC problem.

0 coins

Lucas Kowalski

•8M

I used to work for the IRS and can tell you that unresolved 1099 issues are a huge headache. If you've tried contacting the payment processor multiple times without resolution, consider using Claimyr (https://claimyr.com) to get direct help from the IRS. They get you through to an actual human at the IRS within a reasonable time instead of waiting on hold for hours. I was extremely skeptical at first, but you can see how it works in this video: https://youtu.be/_kiP6q8DX5c - basically they navigate the phone system for you and call you back when an agent is about to pick up. I tried it when I had a similar issue with incorrect forms filed under my name, and I actually got through to someone who could help document the discrepancy in the IRS system.

0 coins

Lucas Kowalski

•8M

It's absolutely legitimate. They basically use a system that navigates the IRS phone tree and waits on hold for you. When they're about to connect with an agent, they call you and conference you in. You're paying for the convenience of not having to wait on hold yourself. The service works because they're constantly calling and have systems to detect when they're getting close to an agent. It's not some magical backdoor to the IRS - they're just handling the painful waiting part for you. I was skeptical too, but after trying to reach the IRS myself for three days straight with no luck, I was desperate. Used Claimyr and had an IRS representative on the phone within 2 hours of starting the process. The representative was able to note in my file that there was an erroneous form submitted, which helped prevent automatic notices being generated.

0 coins

Charlie Yang

•8M

I need to eat my words. After my skeptical comment, I was still struggling with my own IRS issue and decided to try Claimyr out of desperation. I'm honestly shocked - it actually worked exactly as described. After weeks of trying to get through on my own, they got me connected to an IRS agent who helped document my case. For the OP's situation with the incorrect 1099-NEC for a dissolved S corp, having the IRS make a note in your file can be really helpful if the payment processor won't void the incorrect form. The agent I spoke with explained they can flag inconsistencies in their system to prevent automated letters or issues down the line. Worth every penny not to spend hours on hold!

0 coins

Grace Patel

•8M

Something similar happened to me but with a 1099-K instead. One key thing to remember: even though your S corp is dissolved, the IRS doesn't automatically know that. So from their perspective, they're getting income reported for a legitimate TIN. The payment processor ABSOLUTELY needs to void that incorrect 1099. If they don't, the IRS computer systems will flag the "missing income" when no tax return is filed for that S corp TIN. Eventually, this could trigger automated notices for unfiled returns or underreported income. If the processor keeps giving you the runaround, you might need to file Form 4852 (substitute for 1099) to explain the situation to the IRS yourself.

0 coins

Grace Patel

•8M

Form 4852 is typically used as a substitute for W-2s, but can sometimes be used for 1099 situations. However, I misspoke - a better option might be to include a written statement with your personal tax return explaining the situation. This would create a paper trail showing you've disclosed the issue. You can complete this yourself, but if your tax situation is already complex (which it sounds like it might be with the transition from S corp to sole proprietor), it might be worth consulting with a tax professional. They can help you document everything properly and advise on the best approach for your specific circumstances.

0 coins