Erroneous 1099 Procedure

[cheryl20772]

Several people have spoken with IRS agents about this problem. The info we have gotten has filtered out to determine a path of action for the present.

1. The links for filing your general complaints can be found on the Matrixwatch.org site
here http://www.matrixwatch.org/forums/showthread.php?t=2969

2. It's important to first contact STA through their Help Desk http://www.ymhelp.com/ You need to politely tell them that you are not a member of STA anymore and request that they reassure you that your account is closed and amend your 1099 to reflect that you were not a member last year and that you received zero money. It's my concern that if the account is not terminated or closed, they will continue to send 1099's for future years.

3. They will reply with their canned reply telling you that they cannot change the 1099, and that they didn't pay you money, but advertising credits. The IRS will ask you if you requested the amended 1099; so make sure you get this part done. Keep copies of your communications.

4. Then, on February 15th call the IRS at 1-800-829-1040
Ask for assistance with an erroneous "1099 Misc" Tell them that you received an erroneous 1099 Misc and they will take your details to investigate this. Be sure you ask for a specialist on 1099 Misc or you might get someone who doesn't know what to do.

February 15 is the day for filing reports of erroneous 1099's. They will take your information over the phone and you will get a reply from them by the mail. They will also send a form to STA requiring a reply from them.

This is not guaranteed to get things fixed, but it is the procedure that can be done now. Our problems are not just concerning what STA has done, but also our personal problem with this 1099. These steps will begin an examination of your visible tax obligation which cannot be ignored. It won't just go away. Be sure to ask the agent how to handle your taxes this year regarding this disputed 1099.

This is all in addition to any other complaints you might file with IRS using form 3949 or with IC3.

The IRS agents are paid to assist us. I have spoken so far with three different ones and they are all very courteous and try to help me as much as they can. They do have varying levels of abilities. It's okay to call back and talk with another one if the first doesn't fully answer your questions - or if you later think of more questions.

I sure hope that this procedure leads us to a favorable resolution. STA was obligated to send 1099's if they gave something of value to members. The problem is, we can't pay taxes using advertising credits....they are valueless to non-STA members.

[YMSurvivor]

Excellent info! Thank you Cheryl.

I then have an Important question. What If you received a small income back of 65.00 dollars in 2006 and you read adds all the way through 2006 and got a hugh 1099? this happened to me. If you got a tiny amount back but got an outrageous 1099 for thousands can you still go through this channel then? Thanks I appreciate any help someone can give me here.

Originally Posted by Unregistered

I then have an Important question. What If you received a small income back of 65.00 dollars in 2006 and you read adds all the way through 2006 and got a hugh 1099? this happened to me. If you got a tiny amount back but got an outrageous 1099 for thousands can you still go through this channel then? Thanks I appreciate any help someone can give me here.

I'm sorry to hear that this happened to you, too.

Yes, filing a compliaint with the IRS is your answer. In addition to the info Cheryl has provided, see these links, too.

STA TAX FRAUD - COMPLAINT TO IRS
EZ WAY TO PROVE ZERO FMV of WAC

Thanks so much for this help God Bless

You are very welcome.

When we help each other, we help ourselves - and vice versa.

Please let us know how it goes?

[cheryl20772]

Originally Posted by Unregistered

I then have an Important question. What If you received a small income back of 65.00 dollars in 2006 and you read adds all the way through 2006 and got a hugh 1099? this happened to me. If you got a tiny amount back but got an outrageous 1099 for thousands can you still go through this channel then? Thanks I appreciate any help someone can give me here.

The fraudulent part of your 1099 is the part in excess of what you actually were paid.

They are claiming that we received advertising credits worth $10 each. We are telling the IRS that these ad credits were, given back when we closed our accounts, not worth $10 each on the open market (see the classified ads as proof), issued to closed accounts, etc.

If you are still a member of STA it will be a bit more difficult for you to prove that these WAC's are of no value to you. The fact remains that they did not put any money into your pocket that you can use to pay your taxes, nor do they have potential to do that.

[YMSurvivor]

If you are still a member of STA it will be a bit more difficult for you to prove that these WAC's are of no value to you. The fact remains that they did not put any money into your pocket that you can use to pay your taxes, nor do they have potential to do that.

Cheryl, you are living proof that no matter what we do, we will remain members of STA (although status may be Inactive or Suspended) for as long as STA continues to "operate."

Which, to me, makes it even more crucial for us to provide "outsider-friendly" evidence of the absence of FMV of WAC. If we can accomplish this, the IRS might finally be willing to shut down the STA money pit and we can finally relax.

I can hardly wait to hear what the IRS says on Thursday.

[YMSurvivor]

From wahmse on the Matrixwatch forum thread:http://www.matrixwatch.org/forums/sh...?t=5008&page=5

My response from IRS call

I wasn't available to make the call yesterday, so I called today. I spoke with an agent named Jeannie. (I got her last name and number, too, but I don't want to list it here.: I didn't ask for her permission to share it.)

Of course, she asked me the usual questions, did I work for this company? Why did they send me this 1099-M? Was the amount reported in box 7 on the 1099-M? How much did they report? Have I contacted them about it? What did they say when I contacted them? After I answered all of these questions, she put me on hold for a couple of minutes.

When she came back on the line, she gave me the following advice:

1. Send the company (STA) a certified letter asking them to correct and file the 1099-M since I have no contract with them or signed agreement to do any work for them. (I told her I had contacted their help desk in an attempt to get this resolved. She said that was good and asked what their response was. I shared with her the email messages that I had received from them. She seemed shocked to hear that they had written, twice, that these 'credits' "are not something that can be cashed in" and "No cash is due IBA's for earned WAC's".)

2. Keep a copy of the letter that is sent, along with the certified receipt. Be sure to put a return receipt on the letter so that if they accept it, there will be a record of who signed for the letter.

3. Expect them to refuse the letter, and be prepared to save the unopened letter when it returns. Maintain copies of all correspondence from them.

4. Do not include this amount in this year's tax return. Although it may take up to a year and a half before I hear from the IRS about not reporting this alleged income, they will, probably, send me a CP-2000 notice, eventually. At that time, submit copies of all the documentation of my attempts to get this 1099-M corrected.

She reiterated, several times, the importance of sending the letter by certified mail and with a return receipt attached.

************************************************** ***

And I want to emphasize, regarding #3, the importance of maintaining the integrity of the Certified Letter process by NOT opening the refused/returned letter when you get it back. SAVE IT, UNOPENED.

AND

#4. DO NOT INCLUDE THIS AMOUNT ON THIS YEAR'S TAX RETURN

************************************************** ****

And from Casandra, in this thread: http://www.matrixwatch.org/forums/sh...9163#post49163

In my letter, I have not asked for a refund, but merely to have the 1099 issued to my number reduced to the same value STA paid to those who returned their WAC's using their back office function. I did return my 160 from the survey and I was paid nothing for them. I only expect the same consideration upon closing my account. I have also asked that my personal information be removed from their active list; so that there can never be any future tax liability to my number from that closed account. Just two simple things I asked for.... we'll see what happens.

[cheryl20772]

today I spoke with the IRS again. The agent told me that they no longer will send a letter to the payer regarding missing or erroneous 1099-M. The correct procedure is to file a form 3949 to report fraud and to leave that amount off your tax computation, but to include notation that you have filed 3949. We file our taxes electronically; so will just leave that 1099 off the taxes and will submit our documentation when questioned later about it.

Doesn't it all just make you sick?