MC Didn't File any 1099's

I know what this is and I would think the MC would know what it is and would have filed....What I don't know is how very important this is and what's the likelyhood of the IRS catching this or doing anything about it?
I have been told to not worry about it, the IRS never checks HOA's...How true is this?...From what I understand, attorneys get one, lawn service, etc...Our lawn service crew make $1980. a month, thats a lot of money that could go unreported....Could the MC be held accountable if the IRS did raise a question?

Sidney,
I am not a financial person but I do not believe that the HOA is responsible for 1099s. You ire those mentioned by a contract and they are responsible for reporting their earnings. If I am wrong, that would be a good learning lesson for me but I don't think that you generate 1099s.

Kathy, that is not entirely accurate.

Our former lawn care service was made out to a "company," however, the "company" was really an individual who was D/B/A (doing business as) a company. His Federal Tax ID number was his Social Security Number.

We were required to file 1099s on him.

You send the vendor a copy and file/send one to the IRS.

Anyone who told you that you didn't have to and that HOAs "never" get checked by the IRS is just passing along bad advice.

The MC doesn't necessarily HAVE to do it, ultimately it would be the responsibility of the treasurer.

Have the MC provide you the list of all your vendors and their Federal Tax ID numbers.

That list alone would be a good guess as to who you need to send 1099s to and for.

If the Federal Tax ID number is a social security number, then send the forms and make sure you close that loop.

Thanks, Michelle...I thought I was right...and the reason I was asking was because I ask the MC for a copy of these forms...she told me she had none...You are right, the MC doesn't file but she has the vendor fill out the W-9, one for the office file and one for the vendor....The MC then gives it to th CPA when having the taxes done. Our MC did not do this and we have many vendors last year....Thats why I was asking how much trouble we could be in if caught....The lady from the IRS told me a $100. pentaly for each form not filed.

But like I said, I was told not to worry about it, the IRS never checks HOA....How could that be? We are so small but on this forum most posters have very very large Associations and Budgets. Now that is talking money that could be made under the table if there was no account of the money paid out.

You could be right but thats not my understanding. We were told if the check is made out to John Smith he would get a 1099 but if we made the check out to John Smith Landscaping, the bank would not cash it for him nor would they let him put it into any account except the Landscape account and then he is responsible for taking care of the taxes.

Title Companys give real estate companies checks for thousands and thousands of dollars and never send a 1099 because the checks are made out to Re Max or Century 21.

I'll email and ask my tax accountant and see what he says, I'll post it as soon as I hear.

GlenL...I don't see one question mark in my last post...

Mary, that is not the only way the IRS would "catch" the non-filing.

There are any number of ways a flag could be set off. And frankly I wouldn't want to risk triggering any attention of the IRS for not doing something that is perfectly simple and easy to do. Why would we risk possible fines for not filing and then also triggering an audit JUST to make sure we didn't "forget" to file any OTHER required forms!

And Kathy, please be aware, there are a lot of people who use a "company" name who are not truly incorporated and exempt from the 1099s.

If there is any doubt, unless you know for sure, it costs relatively nothing to file the 1099, and covers your bases if you do.

There are many self-employed vendors who do work for HOAs who qualify for the 1099. Like I said, our former lawn care company did that. His name was John Doe (not his real name) and his "business" "company" name was "Doe Lawn Care."

However, his tax/federal ID number was his social security number. Guess what we found out after not filing 1099s for the 4 years we used him? We SHOULD have been! Even though we were paying by check, and he was depositing the check into his own bank account (NOT a Doe Lawn Care account as the check was made out to), he was not reporting the close to $18,000 a year we paid him.

That is until we started filing the 1099s.

Then he quit as our lawn care provider!

Go figure!