What steps should a recipient take if they believe the Form 1099‑NEC they received is incorrect?
Erich Ruth
If someone receives a Form 1099-NEC (Nonemployee Compensation) that they believe is incorrect, the IRS expects them to take action quickly — ideally before they file their tax return.
Here’s the proper sequence of steps:
1️⃣ Review the form carefully
- Check all identifying information: your name, address, Social Security Number or TIN.
- Verify payment details: amounts in Box 1 (nonemployee compensation) and any amounts in other boxes like federal or state withholding.
- Compare it to your own records (invoices, bank statements, contracts) to determine exactly what is wrong.
2️⃣ Contact the issuer/payer immediately
- Reach out to the company or individual who sent the form.
- Explain the discrepancy in writing (email or letter) and provide supporting evidence (copies of invoices, payment receipts, etc.).
- Ask them to issue a corrected 1099-NEC to both you and the IRS.
- A corrected form should be marked “CORRECTED” at the top.
3️⃣ Document all communications
- Keep records of who you spoke with, when, and what was said.
- Save all emails, letters, and proof of delivery.
4️⃣ If the payer will not correct the form
- You can still file your tax return on time, but:
- Report the income you actually received, not the incorrect amount.
- Include a statement explaining the discrepancy to reduce the risk of IRS notices.
- Consider attaching Form 4852 (Substitute for Form W-2 or 1099-R) only if the incorrect form is in one of those categories — for 1099-NEC, just provide your own records and explanation.
- You may also notify the IRS by calling their information return assistance line (800-829-1040) after mid-February. The IRS may contact the issuer on your behalf.
5️⃣ Respond promptly to any IRS notice
- If the IRS receives an incorrect 1099-NEC and your return doesn’t match, they may send you a CP2000 notice proposing additional tax.
- Use your saved documentation to respond and prove your reported amount is correct.