Legal Question in Tax Law in Massachusetts

Assessed as Small Business

In 2003 I installed some office equipment in a local law firm as a personal favor. I paid for this equipment out of my pocket and billed the firm only for cost of the equipment. I just received a letter from the IRS that I'm being assessed a small business tax and for the unreported income (equipment expense). What's the best way to resolve this issue?


Asked on 4/17/07, 10:52 pm

1 Answer from Attorneys
Lawrence Graves Coolidge & Graves PLLC

Re: Assessed as Small Business

They must have sent you a 1099 (shouldn't have, but they did); you can file an amended return including on a Schedule C the amount received and the cost of goods sold, which wipes out the income -- if you have a CPA let him deal with it, but otherwise it might be time to get one. Routine personal tax return preparation by a CPA is not expensive.

Best wishes,

LDWG

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Answered on 4/18/07, 8:53 am


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