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Old 08-10-2009, 09:22 PM
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Join Date: Aug 2009
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Only report 1099 income?

I am looking for the following info:

We run a service based business
We have always filed our taxes appropriately and through a CPA.

We provide all clients with an invoice to pay from (recorded in Quickbooks)
Only a handful of our clients send us a 1099 at the end of the year

What are the potential cons of only reporting income that we receive a 1099 for and omitting other sales? It seems as though this would reduce the gross income shown, and the other omitted invoices are likely being reported to the IRS in a lump sum deduction (with other similar expenses for our clients) so how would they be able to detect this?

I assume that the IRS could audit one of our clients that did not provide a 1099 and review all receipts/invoices, but then do they actually follow the trail of every single reciept/expense claimed?

thanks - I'm sure some of you have some strong feelings about this kind of thing... but please give me a realistic idea of how the IRS would track this and the potential consequences?

thanks!



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