Why 1099 accuracy matters

The IRS uses information returns (Forms 1099, W-2, 1099-K, etc.) to cross-check what taxpayers report on Form 1040. When a payer’s 1099 doesn’t match the payee’s return, the IRS may send a notice, assess additional tax, or impose penalties on the payer. Accurate 1099s keep your records straight, protect refunds, and reduce audit risk (IRS, About Form 1099: https://www.irs.gov/forms-pubs/about-form-1099).

In my 15+ years preparing returns, the majority of 1099 problems are administrative: a mistyped SSN, a misplaced decimal, or selecting 1099-MISC instead of 1099-NEC. Those small errors often cascade into time-consuming disputes with issuers and the IRS.

Most common 1099 errors (and how to spot them)

  • Incorrect taxpayer identification number (TIN). Check Box 1 and Box for TIN on the copy you receive. Compare the number to your Social Security Number (SSN) or Employer Identification Number (EIN) on file. Mistyped digits commonly cause IRS mismatches.
  • Wrong dollar amounts. Compare 1099 amounts to your bank records, invoices, payment processor summaries, and bookkeeping. Look for duplicated payments or amounts that include reimbursements that shouldn’t be reported as income.
  • Wrong 1099 type. For example, payers sometimes report nonemployee compensation on 1099-MISC when it should be 1099-NEC (nonemployee compensation) or report platform transactions on 1099-K incorrectly.
  • Missing 1099s. You may have been paid but not issued a 1099. The payer may have made a filing decision (e.g., under $600 reporting threshold for 1099-NEC) or simply failed to file.
  • Name/TIN mismatches. Even if the amount is right, if the name and TIN don’t match IRS records, the IRS treats it as a mismatch.
  • Duplicate or transposed entries. Duplicate filings or swapped digits can create false over-reporting.

Quick checklist to use when you receive any 1099

  1. Compare payer name, address, and TIN to your records.
  2. Match each box amount to invoices, bank deposits, or payment-platform summaries.
  3. Confirm the 1099 type (NEC, MISC, K, DIV, INT) is appropriate for the income source.
  4. Keep contemporaneous proof (contracts, invoices, receipts) in case of IRS questions.

Step-by-step: What you should do as a payee (independent contractor or recipient)

  1. Don’t ignore the form. Review it immediately when you receive it.
  2. Gather backup. Pull bank statements, deposit records, invoices, and contracts that document the amount you actually received.
  3. Contact the issuer. Call and follow up in writing (email) to explain the error and request a corrected 1099. Keep dated copies.
  4. If the issuer agrees to correct, ask when they will file the corrected return with the IRS and send you a corrected copy. Payers file corrected information returns by checking the ‘CORRECTED’ box and refiling Copy A/Copy B per IRS instructions (see IRS corrected returns guidance: https://www.irs.gov/filing/filing-information-returns-corrected-returns).
  5. File your taxes accurately. Report the income as supported by your records. If you report income that differs from a 1099 the IRS has on file, be prepared to document the difference.
  6. If you cannot get a corrected form, file on time and attach an explanation if you file a paper return; if you file electronically, retain the correspondence and documentation in case of IRS notice. If you later get a CP2000 or mismatch notice, respond promptly with proof.

Step-by-step: What payers (businesses) should do to correct errors

  1. Verify the error and confirm the correct TIN, name, and amounts with your records and the payee’s completed Form W-9 (ask for a new W-9 if needed) (see W-9 guidance: https://www.irs.gov/forms-pubs/about-form-w-9).
  2. Prepare a corrected information return. For most information returns, the payer submits a corrected copy to the IRS and provides a corrected copy to the payee. Follow the current IRS filing instructions for the specific 1099 variant.
  3. File corrected returns as soon as the error is discovered. Corrections do not eliminate the original filing deadline requirement—file timely and correct when necessary.
  4. Consider the IRS TIN Matching Program to validate TIN/name combinations before filing (authorized payers can use TIN matching to reduce errors).

If the IRS contacts you about a mismatch

The IRS sends a notice when amounts on returns don’t match what the IRS has on file. If you get a notice:

  • Respond by the deadline on the notice. Provide documentation that supports your return (bank records, invoices, corrected 1099s).
  • If the payer failed to correct, supply your evidence showing the accurate income and ask the IRS to update their records.
  • If the IRS proposes additional tax and you disagree, follow the appeal instructions on the notice and consider professional help.

Sample correction request (short email you can send to a payer)

Subject: Request for corrected Form 1099 for tax year YYYY

Hello [Payer Name],

I received Form 1099-[type] for tax year YYYY showing $X,XXX reported to the IRS with TIN [TIN on form]. My records indicate the correct amount is $Y,YYY and my correct TIN is [correct TIN]. Please prepare and file a corrected Form 1099 with the IRS and send me a corrected copy. Attached are records supporting my figures (invoices and deposit records).

Thank you,
[Your name, address, phone, and email]

Keep this request and any response for your files.

Special situations and common confusions

  • 1099-NEC vs 1099-MISC: Nonemployee compensation was moved to Form 1099-NEC beginning with tax year 2020; reporting to the wrong form can change how payees calculate self-employment tax and expenses.
  • 1099-K increases: Platform and third-party payment reporting rules changed in recent years; amounts on 1099-K reflect gross payment volume, which may differ from net income after fees and refunds.
  • Missing 1099 but income reported elsewhere: You must still report all taxable income. If you don’t receive a 1099, report income based on your records and be prepared to show documentation.

Recordkeeping tips that prevent headaches

  • Collect a completed Form W-9 from contractors before you pay them.
  • Reconcile 1099s against your bank deposits and accounting records quarterly.
  • Keep invoices, payment confirmations, and contracts for at least three years (longer if you have complex tax positions).

When to call a professional

  • You receive an IRS notice and don’t understand the proposed change.
  • The payer refuses to issue a corrected form and the discrepancy is material.
  • There’s potential worker misclassification (W-2 vs 1099) or large-dollar reporting errors. For classification issues see our guide to W-2 vs 1099: Determining Proper Worker Classification.

Useful internal resources

Authoritative sources and further reading

Professional disclaimer: This article is educational and does not replace personalized tax advice. For guidance specific to your situation, consult a CPA, enrolled agent, or tax attorney.

In my practice, addressing 1099 issues early — before filing or immediately after discovering an error — usually prevents IRS notices and reduces the time to resolution. Organized records and prompt communication with payers are the simplest, most effective tools for avoiding prolonged disputes.