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PamelaA1
(Florida)

Posts:1

04/26/2008 7:57 AM
We are a fairly new HOA. One of the BOD's told me we were exempt as a non profit association from filing 1099's for our vendors with the IRS. How can that be? Pa

BrianB
(California)

Posts:1591

04/26/2008 8:10 AM
do you file a 1099 for walmart when you buy things from them? Do you file a 1099 for your doctor when you spend money with him? You need to see if the HOA employees the taxpayer as an employee, or if you are hiring a company to do their job. In the first case, you owe taxes (potentially) and must file. In the second, THEY own their tax liability for income generated.

BradP
(Kansas)

Posts:1742

04/26/2008 8:14 AM
Posted By PamelaA1 on 04/26/2008 7:57 AM We are a fairly new HOA. One of the BOD's told me we were exempt as a non profit association from filing 1099's for our vendors with the IRS. How can that be? Pa Pamela: Brian hit it on the head, if they are your employees then yes you need. If they are a company that is hired then no.

SusanW1
(Michigan)

Posts:1540

04/26/2008 9:46 AM
I disagree - CYA here!!! Give anyone whom you hired a 1099. What they do with them is their issue. You just want to keep your records on the up and up.

BrianB
(California)

Posts:1591

04/26/2008 10:00 AM
just curious susan, do you give YOUR doctor a 1099? or your barber/salon owner? Or your mechanic? If you do not, why not CYA?

BradP
(Kansas)

Posts:1742

04/26/2008 10:03 AM
shoot...that reminds me I forgot to give my kids a 1099 for their allowance this past year...

BruceF1
(Connecticut)

Posts:499

04/26/2008 10:55 AM
There are specific rules that spell out when a 1099 is required. Having once owned a business, I've filed (given to others and reported to the IRS) 1099's before. There are a number of situations which require businesses (an HOA is a "business" under the tax code, read the attached) and, in some cases, even individuals, to report income paid to others on a 1099. A 1099 is NOT used to report the income (wages) of an EMPLOYEE. Another form is used for that purpose. A 1099 is required for anyone who is paid for a service and is required to file and pay his or her (or its) own income tax (such as a contractor, a subcontractor, a lawn maintenence contractor, snow removal contractor, etc.). This is true whether the "person" supplying the service is an individual or sometimes a corporation, and the amount paid during the taxable year exceeds $600. It's more than a CYA, it is a requirement. Failure to file a 1099 could result in a disallowance of the payment as a business expense if the return is audited by the IRS. Yes, even payments in excess of $600 to physicians and physicians corporations are required to be reported to the IRS on a 1099, but not by INDIVIDUALS; only by businesses (such as insurance companies). To sum it up - an HOA MUST file 1099s. It's not an option. Check the tax rules. Read the attached publication.
Attachment: 1426552827071.pdf

SusanW1
(Michigan)

Posts:1540

04/26/2008 12:50 PM
IRS Form 1099MISC must be issued to each U.S. independent contractor that has received payments in the calendar year that total $600 or more for services (including parts and materials). Form 1099MISC must also be issued to U.S. individuals that receive awards, honorariums, and prizes in the calendar year that total $600 or more.

BrianB
(California)

Posts:1591

04/26/2008 3:46 PM
thanks guys! learn something new all the time here. So, as an HOA, we should hire corporations if possible, to do work for us? Would that exempt us from filing these forms?

BruceF1
(Connecticut)

Posts:499

04/26/2008 5:23 PM
Brian, Not sure that would help, or if it's worth the trouble. You must file a 1099 for some corporations (ie. attorneys that are incorporated) anyway. Also, you need to make sure the business is indeed incorporated. Most likely, contractors that would be hired by an HOA are not corporations, but are probably private "companies" (ie. individually owned or partnerships, or formed as an LLC, which is not a corporation. Anyway, it's not a big deal. The forms are very simple to fill out and don't take long, unless you hire a lot of people to do work for you. You do need their taxpayer ID (social security number or other tax ID) and you need to keep track of what you pay them. I always used to have my contract help fill out a form giving me their name, address, taxpayer ID, etc., so I'd have it for my records. Once you complete all the 1099s, you need to send each person a copy of his/her own 1099, then you list all the 1099's on a form 1096 which you then send to the IRS along with their copy of each 1099. Simple. It had to be simple or I would have hired someone to do it for me. BTW - there are penalities for not filing 1099s. The purpose of filing a 1099, by the way, is to make sure the people you hire claim the income on their tax return. The 1099s you send to the IRS are checked against the tax returns of the individuals to make sure the income has been reported. It's best for all concerned to make sure everything balances - your business expense vs a completed 1099 vs the recipient's tax return. In the computer age, it's real easy for the IRS to cross check.

BruceF1
(Connecticut)

Posts:499

04/26/2008 5:33 PM
Oops - I forgot. I DID hire someone to do it for me - the same accountant that did my personal and business tax return. But, it's still simple. I had to sign the 1096, of course, and from what I saw of what the tax preparer did, it was easier and faster than doing a personal 1040 with itemized deductions. I typically had 6 to 10 different contractors during the year. In our HOA, we have an accountant do our annual tax return (1120H) and our 1099s.

SidneyP
(Florida)

Posts:269

04/28/2008 8:01 AM
After reading these posts, I learned about the 1099. I just became the treasure so I ask the resigned treasure if they did this...Her reply was NO...Is this something that HAS to be done? We are a small community and only have a MC, lawn, lake, termite and general maintenance service. The maintenance man, I have a feeling is not licenced, I have ask several times for a copy of his licence, insurance, workmans comp from the MC and I have yet to receive it....I was told he didn't need workman comp because he has only one helper but that he must also have a letter of exemption from the state. Is this right? I feel I need to know these things because I don't want the IRS coming after us...Thanks for any help.

MicheleD
(Kentucky)

Posts:1445

04/28/2008 8:43 AM
Yes, yes, yes and YES. We had only one fellow for whom we ended up having to file a 1099. Our previous lawn maintenance guy. Everyone else was incorporated and we paid them more than the $600.00 It was when I called to get the lawn maintenance guy's taxpayer ID number that we discovered he had been working for us under "rigged" bids, caused by a sort of cahoots thing between the former treasurer and the former Architectural Committee chairman/board member (who also happened to be in charge of securing competitive bids.) We found out that all our payments, upwards of $18,000 on the year, were in essence TAX FREE income to the lawn guy!! When we told him we needed to file 1099s he sent us a bill for $5,400 for that year so that he would be able to pay the income tax on our payments to him!! We were like "pfffft YEAH! In a pig's eye!" He said that the former board member had promised him we would never file 1099s on him. It takes nothing to do it but a few minutes of your time, and it's better to stay on the RIGHT side of the IRS than not.

PaulM
(Pennsylvania)

Posts:1347

04/28/2008 8:53 AM
PamelaA1: You have not stated whether you actually have vendors as your 'employees'. There is a difference between an employee and a company performing a service for the association community, for which you are under a contract. Hopefully, you do NOT have vendors as your employees.

SidneyP
(Florida)

Posts:269

04/28/2008 9:31 AM
Once again, I'm placing myself in the dumb catagory...I'm not sure I understand...All are a business as far as I know (the MC/termite/lake services are listed in the phone book)....lawn service, we have a contract, as I stated I'm not sure about the maintenance man(men). We had several lawn service companies last year that caused us to go serveral thousand dollors over the lawn budget.(and I think they were all a friend of a friend-but each were paid over $600.) I'm pretty sure the one we have now has a license, he gets $1958. a month. We do have contracts on all the vendors except I can't get any information on this new maintenance man( it seems each MC we have had has there own maintenance man they use) The last one was charging the Association $20/22. an hour but we found out the man doing the work was only getting $10. an hour....another way for MC's to pad their income. I feel this is happening again because they won't send me the files I have requested. I am already on the Boards/MC's sxxt list becuae I ask too many questions and want to many answers. I was just elected back to the Board Mar.31st. Asking questions is not on eithers agenda... Can we get in trouble? Is there a likely hood the IRS will catch this?...sould I ask the MC about this? Our taxes were already files a few days late. They were due on the 15th of Mar. right?...sorry for all the questions but I'm not sure what to do.

MicheleD
(Kentucky)

Posts:1445

04/28/2008 9:50 AM
My philosophy on 1099s is, when in doubt, file 'em. Doesn't matter if they are in the phone book. Independent contractors can be in the phone book, too. Generally you are NOT required to report payments to a corporation, but if you're not sure if someone doing work for you is a "corporation" or not, just go ahead and file it. Just ask for their tax ID number and fill out the form at the end of the year (do it now for last years, if you need to). That way your bases are covered. If you had employees, they would receive W2 forms. The 1099 form is used in basically the same way, but it's a record of payments your organization made that is INCOME to the vendor, independent contractor, who did work for you over the year. If you paid that independent contractor more than $600, then you would need to prepare a 1099-MISC form, give him a copy and send a copy to the IRS. I don't know what the penalty is for never filing them, but I wouldn't want to be the treasurer during that random audit and it's discovered.

MicheleD
(Kentucky)

Posts:1445

04/28/2008 9:58 AM
Just so you know it's a standard expectation, go to conoco-phillips website page that deals with Vendor Relations: It says: Form 1099-MISC Information ConocoPhillps Company and subsidiaries will issue IRS Form 1099-Misc to reportable vendors by February 1 of each yeara. If you have questions concerning your 1099-Misc Form, or have not received a 1099-Misc form for goods or services sold to ConocoPhillips, please contact us at XXX-XXX-XXXX. Please have the following information ready when you contact us: Vendor Name Vendor Number Vendor Address Tax Identification Number. http://vendors.conocophillips.com/form1099/index.htm I have a file on each vendor we use with their Tax ID number. Each one. That way, if we need to file a 1099, I already have it. As I said, we didn't discover that we WEREN'T filing on some of our vendors until I became treasurer and there was no tax ID number on any of the files for any of our vendors. In the process of calling them to update the files, that's when we 'discovered' the tax-free income we had been providing or previous lawn maintenance contractor. He was in the phone book, too. Any legitimate vendors are totally aware of 1099-Misc forms and have absolutely NO problem providing you with their tax ID number. If you run into any who do, recognize that as a flag and make sure that all your ducks are in a row when dealing with him. Just type "form 1099" into a google search and you'll find all the info you need about them.

DeeB
(Arizona)

Posts:18

04/28/2008 12:08 PM
For 1099 official IRS instructions and information for the year 2007 go to the following website: http://www.irs.gov/pub/irs-pdf/i1099gi_07.pdf For 1099 official IRS instructions and information for the year 2008 go to the following website: http://www.irs.gov/pub/irs-pdf/i1099gi.pdf There are penalties as much as $100 that can be assessed for each non-filed form, at least for the year 2007. The formal form to use to request a vendors tax identification number is the W-9, you can find this at the link below: http://www.irs.gov/pub/irs-pdf/fw9.pdf and the instructions at: http://www.irs.gov/pub/irs-pdf/iw9.pdf Remember an "employee" is paid via a paycheck and their earnings are reported to them on a W2, not a 1099. Basically, but the links mentioned above give more detail, you pretty much are required to issue 1099's to all incorporated vendors that provide a service to you, to which you have paid them in excess of $600 for the year. Attorney's are the exception to this, they must be issued a 1099 regardless of their corporate status or the amount that you paid them. It is always a good idea to ask any contractor that does work on your property, whether they are incorporated or not, to provide you with their valid insurance certificate, BEFORE you allow them to do any work. If they perform work on your property and get hurt or hurt someone else and they are not covered, then the liability will be the associations. When you are audited for workmans comp your insurance premiums will reflect on if you keep valid certificates of insurance on record for all vendors working on your property pr not. If you don't have a certificate on file for a certain vendor your insurance premiums could be higher than if you did. Someone has to be covered and if the vendor is not then the association may have to pick up the coverage.

DeeB
(Arizona)

Posts:18

04/28/2008 12:12 PM
Correction, my last post said, "....you pretty much are required to issue 1099's to all incorporated vendors ...", I meant to say "...you pretty much are required to issue 1099's to all UN-incorporated vendors....",that you have paid in excess of $600 during the year to.

BruceF1
(Connecticut)

Posts:499

04/28/2008 1:47 PM
Sidney, Yes, 1099s are required for each vendor, unless the vendor is incorporated (most are not). That includes your management company. Some self employed individuals may prefer that you don't give them a 1099 because then they have to report that income to the IRS. But, that's exactly why the IRS insists that you provide 1099s - to help prevent that sort of tax abuse, similar to what Michele was referring to above. You are violating the law by not providing 1099s. No two ways about it. And, here's another thing to remember. If your board has D&O insurance, you may find that it doesn't provide coverage if you violate the law. So, if you are assessed a penalty by the IRS, guess who pays - your homeowners do! And, penalties are not deductible as a business expense. You may never get caught, but why take a chance? Beside, you pay taxes. Why shouldn't your vendors pay taxes too? People should not mind you asking questions. If they get upset with you, maybe it's because they don't have the right answers. Some people don't like it when others suggest they may not have been doing things correctly. Perhaps your management company has been providing the 1099s, although I would think the treasurer would have had to sign the transmittal form (the 1096) that's sent to the IRS, so he would know about it. I find it hard to believe that a reputable, professional management company would let you get away without filing 1099s.

SidneyP
(Florida)

Posts:269

04/28/2008 2:27 PM
Bruce...my man....I have posted many post to this forum...I have said many times that this Board & MC do not like me because exactly what I have done here...I ask questions and they won't answer me, so I ask again and again. For over a year the Board would not let me volunteer to the Board but I out smarted them this time I went after proxy's so am now the new treasurer. Once again I am a thorn in their side. From the very beginning, 2006, HO takeover I have stated over and over, lets follow the CC&R's and if the HO's don't like something, lets vote to change it. Lets not pretend it's not there. They didn't like this. They enforce some rules and ignore others, they allowed interest to be charged on some and not others, took from Reserves, not funded Reserves in over a year, filed the taxes late...you name it and it hasn't been done incorrectly. I have called asking them to explain why, asking questions, they won't answer, they don't like being ask questions and already they want me off the Board (just got on Mar31st)...This MC has already e-mail me, calling me names because I question them...She keeps replying to me that she(PM)/they(MC) are professionals and don't need my advice or interference w/their job. I am sure they didn't file any 1099's because the resigning treasurer told me she was sure they hadn't, shes never signed anything. She said it would cost the HOA more money...duh..so we break the law. I'm going to e-mail the bookkeeper and ask her but what if she says NO, she didn't get the vendors TIN and she didn't get the CPA to do it. What then, do I just keep my mouth shut, tell the IRS, or ask them to file a amended form?... I feel I have the right to want the rules followed as a HO/Board member for my own sakeprotection but I don't want to do something that will harm all HO's...What if they then turn against me too..Right now the HO's minus Board are w/me but maybe not if it hits their pocket book. I feel I'm between a rock and a hard place.

BruceF1
(Connecticut)

Posts:499

04/28/2008 3:00 PM
Sidney, Your previous treasurer said that filing 1099s would cost the HOA more money? They don't cost anything to file, if you do it yourself, except for the postage to send the 1099s to each vendor and to send the copies to the IRS. You could offer to pay for that out of your pocket! Even if you hired an outsider to do it, it's pretty cheap. It cost us $159 to have our MC prepare the 1099s for us this year. When I had my business, I think my tax accountant charged me something like $100 to prepare about a half dozen 1099s. It was a flat initial fee plus so much for each 1099. The only other way I can think of that it would cost more money is that you might have to pay vendors more because they would now have to pay taxes. But then, the honest ones do pay taxes, so maybe that's why they cost a little more. You might ask your other board members and you PM this: If the vendors are not being honest by paying taxes, how can you be sure they are being honest in their dealings with our HOA?

MicheleD
(Kentucky)

Posts:1445

04/28/2008 4:50 PM
Sidney: You are the treasurer. I am the treasurer of our HOA. We don't have a management company. However, if we did, as TREASURER, I would request a review of all our vendor files. I would check to see that all vendors have provided TINs. If they did not, I would hand the list of those we don't have over to the PM and request that she obtain them. Or, I would just call them myself, get the TINs then put them in the files. I would then request all the tax documents. If there are no 1099-Misc's in there, I would notate that and ask the PM (or whomever did last year's taxes) why not. If they were told NOT to provide them, I would make them fill them out and file them anyway.

SidneyP
(Florida)

Posts:269

04/28/2008 5:31 PM
So, Michele, I do have the right to ask for these files? This MC started Oct 07...of course they did see that the 07 taxes were filed (late) but when I say that something has been done wrong, they blame it on the last MC (even when if ha[[ened since Oct.)...and they tell me they weren't given that file. When I call the old MC they told me they gave them everything....Since they do have the names of these vendors (some only worked a month but earned way over $600. Shouldn't there be a record somewhere? Isn't the Board suppose to keep files also, shouldn't there always be a back up copy...Especially since each MC seems to "lose"/hold back files (kinda like Hillery)...Is it ok for me to call the tax preparer? Am I making to big a deal out of this...or do I have the right to know the MC is doing their job for the large amount the HOA is paying them.

SusanW1
(Michigan)

Posts:1540

04/28/2008 6:14 PM
Sidney, If you have a MC, AND a bookkeeper AND a CPA - and they ALL say the 1099's weren't filed? Amazing . . . (P.S. you can buy a packet of them at Sam's Club and hand write them out yourself, if needed) Also, I believe that not-for-profits have a different IRS tax form deadline, other than April 15. (May be May 15) As treasurer, you are to oversee that things get done. Not do them by yourself. If you must, start establishing current policies if you think things are not being done correctly. Establish a Finance Committee that can meet and get answers that you seek on these internal questions. Then you can make an accurate report to the board. I am sure every HOA has stuff buried, but don't dwell on them. Just cover your watch and get things ready for the future.

MicheleD
(Kentucky)

Posts:1445

04/28/2008 7:05 PM
Posted By SusanW1 on 04/28/2008 6:14 PM Sidney, If you have a MC, AND a bookkeeper AND a CPA - and they ALL say the 1099's weren't filed? Amazing . . . (P.S. you can buy a packet of them at Sam's Club and hand write them out yourself, if needed) Also, I believe that not-for-profits have a different IRS tax form deadline, other than April 15. (May be May 15) As treasurer, you are to oversee that things get done. Not do them by yourself. If you must, start establishing current policies if you think things are not being done correctly. Establish a Finance Committee that can meet and get answers that you seek on these internal questions. Then you can make an accurate report to the board. I am sure every HOA has stuff buried, but don't dwell on them. Just cover your watch and get things ready for the future. Establish a finance committee out of what? from where? From all the homeowners that are clamoring to get in line to be delegated all sorts of HOA or committee to? The fact is, at least in my neck of the woods, we are lucky we barely get enough board members to cover what needs to be done. "We" are "it." Now, to answer Sidney's question, the management company works for you. You are the treasurer. Why would you not be able to secure the information you want or need in order to make sure "your watch" is covered properly. I'm not a big fan of telling people they aren't doing their jobs right. On the other hand, I'm excellent at telling them what I expect them to do for me, regardless of how they did it in the past. It's not that they're doing or did anything "wrong," it's that this is how I want it done now. Again, you are the treasurer. If you want to establish a policy whereby they provide you with a list of all vendors with Vendor Name Vendor Address Vendor Contact info Vendor TIN And whatever else info you want on the profile, then do it. I would imagine that the MC should be saying, "Do you want that information by regular mail or will email do?" If that information is NOT available, request, in a professional manner, that they compile it and provide it to you. No need to get testy with them or make comments about how this or that wasn't done correctly before. Simply state, this is what I need and this is when I need it. I, for one, would want to know all the history on all our current vendors. How much have we spent with them in total? How much year-to-date? How much last calendar year? If they provide that information for you even twice a year, you can fill out and submit your own 1099-misc's and keep them on file.

DeeB
(Arizona)

Posts:18

04/28/2008 7:26 PM
Sidney, Don't forget that the MC works for you, as many people have stated already. The files of paid invoices are actually yours, (your HOA's) property. Any home owner, as well as Board member, has the right to view the accounting records, it's the homeowner's money that the MC is dealing with, not their own. Your Board Members should be getting the financials on a regular basis, ie: monthly, quarterly. You as the Treasurer, can ask to meet with the MC, bookkeeper, CPA or whomever prepares your financials before they are finalized to go over them before they are printed out and issued. The accounting files are yours, you can ask to see whatever is in them. With your financials, ask for a general ledger for the year, or whatever period you want to look at. The general ledger will detail out what was paid out and to whom and for what. You could prepare your 1099's from that information. As someone else suggested, you can get the forms at an office supply store, or order them from the IRS. As the Treasurer, it is amazing to me that you are having such trouble getting information from your MC. I would be concerned that they were trying to hide something from you. All the more reason for the Board to take a look at the service you are getting from this MC. Perhaps telling the MC if they are not a little more cooperative that you will be taking your business elsewhere, of course you need other Board members to back you up on this. If an independent CPA is involved with your HOA, they should be made aware of what is going on between your HOA board and the MC, especially if the CPA prepares an Audit for your HOA. They need to be alerted to any suspected risk that may involve fraud. If an audit is prepared for your HOA, you might want to consider orgainizing an audit committee. The CPA is required to discuss the audit with the audit committee. But even without an audit committee, there should be some communication between the Board and the CPA who performs the audit. If you do not have an audit performed, fraud risks are still evaluated by the CPA for a review or compilation, but just not as extensively. Before, just contacting the CPA yourself, I would check your CC & R's and operating agreements to see if there is some protocol listed as to how this commumication should be handled. Talk it over with other Board members and come to a consensus. But you definetly have the right to call the CPA as a Board to get a copy of the tax return. Although HOA's organize themselves as a non-profit organization, they are not treated as such for IRS purposes. If you file an 1120 or 1120H for taxes, those were due on 3/15/08, unless for some reason you have a different tax year than the calendar year, but you would need permission from the IRS for that. But like individuals, corporations (Form 1120 and Form 1120H are actually corporate tax filing forms), extensions can be applied for and are granted. If you have a CPA that files your tax returns, and if it wasn't complete by 3/15/08, my guess is that an extension was filed, (a copy of the extension will be part of the tax return, ask for a copy). Something that you could ask about, because if they knew it was going to be late the extension should have been filed, otherwise another incident to illustrate that they are not acting in the best interest of your HOA. Chalk that up for points and after so many points, fire them and look for a more reputable MC.

SidneyP
(Florida)

Posts:269

04/29/2008 8:25 AM
OK, here goes another dumb question....exactly what is the difference between incorportated and unincorportated mean...I am still not sure who should get the W-9/1099....does the attorney, MC's, Pest control, housewashing com., Lake Doctor, etc....basically everyone who services us? I'd really like to know what I am talking about before I contact the MC for these files....I always preach on doing thing right therefore I want to be sure of what I am asking for.... How can I look for a legal business license? Sorry if I appear so stupid but the only way for me to learn is to ask.

BruceF1
(Connecticut)

Posts:499

04/29/2008 9:21 AM
Sidney, Michele and Dee have both given you some good advice. As far as determining which vendor is incorpoated and which is not, don't worry about it. If they're incorporated, they probably use "Inc" after their business name. It's not hard to find out if they really are incorporated; it should be on file somewhere, perhaps with your Secretary of State's office. If they don't have "Inc" after their business name, or if the use "LLC" or something like that, they probably are not. But, as was said before, don't worry about it. Just send them a 1099 anyway. I think Michele also gave you good advice about not worrying about past deeds. You can't be held responsible for what the treasurers before you did or did not do. You can be held responsible only for your own actions as treasurer. What does a treasurer do? Your responsibilities should be stated in the bylaws. It's not uncommon to have the routine tasks performed by a management company, but the treasurer is responsible for overseeing the tasks - sort of like a supervisor would be, for example. In our HOA, the MC receives the bills from the vendors and cuts the checks, but the treasurer gets a report on the bills and has to sign the checks. The MC prepares the financials, records all incoming and outgoing funds, collects homeowner assessments and makes the deposits, but all that activity is placed into (a rather lengthy) report each month which is then given to the treasurer for his review. Our treasurer and the MC have done battle on more than one occasion. The MC has all the tax forms completed, but our treasurer reviews them and signs them before they are sent to the IRS. Can you take the tasks over? Probably yes, that's your prerogative. But, since you're paying your MC to do it, why should you? You're job should be one of reviewing, not one of doing. Maybe your MC is not used to working with someone who wants to be so closely involved. The idea of having a management company performs these tasks is that, being professionals, they are supposed to know what tasks need to be done, how to do them efficiently, and have the resources to do them. As stated previously, you're job should be to review their work. Remember, you are responsible to the homeowners. Now, for the 1099s. What to do. First, if they were not done, is it your responsibility? I would say, for tax years prior to 2007, probably no. As for tax year 2007, that's more difficult to answer. If you were treasurer as of Jan 1 of this year, then I would say definitely, yes, you should have prepared 1099s and sent them out in January. If you recently became treasurer, should you file them now, knowing they haven't been done for tax year 2007? Probably yes. However, you must recognize the following: 1. If you prepare and file 1099s for tax year 2007 now, you will incur a penaly, since they are being filed late. This will cost your association money. 2. Some vendors may be very unhappy with you. If a you send a vendor a 1099 now, after he/she has already filed their 2007 income tax (the dreaded April 15 deadline has passed, remember?), and if he/she has reported your payments as income on their tax returns, and if the amount closely matches what you show on the 1099, then, no big deal. They don't have to send the 1099 to the IRS anyway (only you do that), so there's nothing those vendors have to worry about or do. BUT (and here's the big but), if you send a vendor a 1099 and that vendor has NOT included your payments as income or if the amount he/she reported differs substantially from what you show on the 1099, then he/she is going to be very, very, unhappy! That vendor now has to decide whether to just ignore it (and risk getting caught by the IRS), or to take the safe path and file an amended 2007 tax return and paying a penalty plus interest for the income that was not reported.

SidneyP
(Florida)

Posts:269

04/29/2008 10:29 AM
Bruce...lol, in todays world, if I were to send 1099's now I'd probaby get shot... What really bothers me about this is that we are paying dearly for a MC that is suppose to be professional and have the knowledge and training to do these things and to guide the Board in the right direction. Our Board places everything in the MC's control which is wrong. Now I'm back on the Board and I ask questions, I ask for files and am placed in the postion of being the bad guy/trouble maker... Tomorrow, I will have been back on the Board a month and after looking at files found that the MC (old one) had transfered money from the Reserves to operation account, not funded the Reserves for over a year, charged some HO's interest and not others (new MC)..when I ask about these things, I was given a slap on the hand for upsetting the MC and warned. I did send an e-mail a few minutes ago requesting all the W-9's, 1099's and 1096 from last year and any new vendors we have this year...I know of one, the general maintenance man the MC send's. Over two weeks ago I requested his information, license,insurance, etc. I have yet to receive a reply. Our 2007 taxes were signed by CPA on 3/18/07 and then signed by the secretary on 3/19/07, which of course made them late. I had requested a copy of the tax return on the 10th and was told they hadn't gotten it back yet..Personally, I don't even thing they had sent it. When I received the copy, the MC/bookkeeper added a note to the tax return I requested and answer to the question I ask, "when are the association's tax return due? (I already knew the answer)The note said,"generally, an assoc. tax returns are due on the 15th of the 3rd month after the end of the year. With a properly filed extension form, the due date may be delayed by six months, to the 15th, 9th month after the fiscal year."....There was no reason for our tax return to be filed late..We are so small(77units), have nothing to claim...a five minute job. Guess, I will do as you two have said, just forget last year and worry about this year. I still want to know what they say about those files.

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