We paid a fee to an individual for a cancelled deposition; we have no relationship with him. We have only his name from opposing counsel and it may be difficult to obtain a TIN. The check was sent to the opposing counsel. Do we send a 1099?


If the cancellation fee was $600 or more, you should issue a 1099 to the individual, and if the check you sent to the attorney had the attorney’s name on it, you must issue a 1099 to the attorney as well. If the amount was less than $600, you do not have to report it.  For the individual, report in box 3, since no services were provided.

Attempt to get the tax ID, and keep a record of your attempts to get a TIN. If you cannot, issue a 1099 for the individual anyway, leaving the TIN blank. If you receive a TIN after issuing the 1099, issue a corrected 1099.  

If you do not get a TIN, it is possible (but by no means certain) that you will receive a penalty notice from the IRS. If so, you might succeed in having the penalty abated by providing evidence of your attempts to obtain a TIN. See IRS Pub 1586.

We confirmed this with IRS information reporting specialist Ms. Tennett (ID# 1001307512).

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