Taxpayer Sues Company for Fraudulently Issuing a Form 1099 in his Name

Posted on October 15, 2018

In a recent case in the Northern District of Illinois, Dr. Angelopoulos sued Keystone Orthopedics Specialists, S.C. (“Keystone”), for fraudulently issuing a Form 1099 to him for 2007 reporting more than $159,000.00 in income to him even though he only earned $38,000.00 from Keystone that year. The issuance of the fraudulent Form 1099 to Dr. Angelopoulos caused him to have a dispute with the IRS in the United States Tax Court and caused him to incur substantial legal and accounting fees. Dr. Angelopoulos then sued Keystone seeking $327,000.00 in fees and costs. The law does allow for recovery of damages for filing a fraudulent information return, including a fraudulent Form 1099. The award is either a flat sum of $5,000.00 or actual damages. The Court held in favor of Dr. Angelopoulos regarding the fraudulent Form 1099. However, the Court refused to award the $327,000.00 sought by Dr. Angelopoulos because it felt it needed more information to determine the damages he sustained by the filing of the fraudulent Form 1099. Has someone issued a fraudulent or incorrect Form W-2 or Form 1099 to you? Call us, we can help.