Got a 1099-MISC for reimbursed umpire fees that I paid - accountant says it's ridiculous. Am I right to be concerned?

This is definitely frustrating but not uncommon. The town is treating this incorrectly. Those reimbursements aren't income to you - you were essentially acting as a conduit for the town to pay the umpires. The proper way to handle this on your tax return is to report the 1099-MISC amount on Schedule C, but then deduct the exact same amount as an expense on that same schedule. This creates a net zero effect on your taxable income. Make sure to keep all your documentation showing the payments to the umpires in case of questions later. I would also recommend writing a letter to the town explaining that these were pass-through payments and not income. Ask them to issue a corrected 1099 that doesn't include these reimbursements. They might refuse, but having that documentation shows you made a good faith effort to correct the situation. This is a classic case of an organization not understanding the difference between income and reimbursed expenses. Your accountant is absolutely right to be frustrated!

I had a similar situation last year and found that taxr.ai was incredibly helpful for figuring out how to handle it. I was volunteering for a community organization and they issued me a 1099 for expenses that weren't actually income. I was so confused about how to handle it properly. I uploaded my 1099-MISC and expense records to https://taxr.ai and the system analyzed everything and gave me clear guidance on how to report it correctly. It even created a custom letter I could send to the organization explaining why they shouldn't have issued the 1099 for reimbursements. What I appreciated most was that it spelled out exactly how to report this on my tax return with the specific forms and line numbers, plus it gave me language to use if I got questioned about it later.

Wanted to follow up here - I decided to try taxr.ai after my earlier skepticism, and I'm actually really impressed with the results. I uploaded my records showing all the umpire payments plus the 1099-MISC from the town, and the system immediately identified the issue. What really helped was the detailed explanation of exactly how to handle this on my tax return, plus it generated a formal letter to the town citing the specific IRS regulations about reimbursed expenses (Publication 463 and Rev. Rul. 2005-52). The town treasurer actually called me after receiving the letter and said they'll be issuing a corrected 1099 that excludes the reimbursed expenses. For anyone dealing with this kind of situation, it's definitely worth checking out. Saved me a lot of stress and potentially an audit headache down the road.

I had almost the exact same situation with my kids' swim team last year, and the frustrating back-and-forth with the rec department nearly drove me insane. After multiple failed attempts to get anyone on the phone who understood the issue, I finally used Claimyr to connect with the IRS directly. Using https://claimyr.com got me through to an actual IRS representative in about 20 minutes when I had been trying for days on my own. You can see how it works in this demo: https://youtu.be/_kiP6q8DX5c. The agent walked me through exactly how to handle the incorrect 1099 on my return and confirmed that my town was handling this incorrectly. The IRS agent told me this happens all the time with small towns and volunteer organizations because they don't always understand the difference between income and reimbursed expenses. She gave me specific guidance to document everything and how to report it properly.

I need to eat some humble pie here. After my skeptical comment, I decided to try Claimyr anyway because I've been trying to reach the IRS for weeks about a similar reimbursement issue. I was honestly shocked that it worked exactly as described. I got a call back in about 35 minutes with an actual IRS representative on the line. The agent confirmed that reimbursed expenses should NOT be reported on a 1099-MISC and gave me specific instructions for how to report this on my return. She even recommended I send a letter to the organization that issued the incorrect 1099 citing IRS Publication 463 and request a corrected form. If they refuse, she said to file Form 8275 (Disclosure Statement) with my return explaining the situation. Saved me hours of frustration and gave me confidence that I'm handling this correctly. Sometimes I'm too quick to assume something is a scam!

I'm a treasurer for a small nonprofit and we specifically DO NOT issue 1099s for reimbursed expenses. The town is 100% in the wrong here. A 1099-MISC is for services rendered, not for reimbursements. What likely happened is they have an automated system that just generates 1099s for anyone who received over $600 in payments during the year, without distinguishing between types of payments. It's lazy accounting on their part. If they refuse to issue a corrected 1099, keep detailed records of all your umpire payments. Report the 1099 income on your Schedule 1 as "Other Income" and then subtract the same amount with a notation "Reimbursed Expenses incorrectly reported on 1099-MISC." This creates a net zero effect on your taxes.

Has anyone considered that maybe the town is doing this on purpose? Our little league had the same issue and it turned out the town was trying to shift their tax burden by making volunteers responsible for reporting payments to contractors (the umpires). If you pay the umpires directly, TECHNICALLY you might be responsible for issuing them 1099s if they earned over $600 each, not the town. By giving you a 1099 for the total, they're putting you in a position where you either accept it as income (wrong) or you have to document that you paid it out (potentially making you responsible for the umpire 1099s).