Generally, if you’re an independent contractor, you’re considered self-employed. So instead of receiving a W-2, you might get a Form 1099-NEC (for non-employee compensation), which reports the income you earned during the year. The IRS compares what it receives on documents such as W-2s or 1099s with what people report on their federal income tax returns.
If there’s a discrepancy, you’re likely to receive a CP2000 letter from the IRS. It can be a frightening notice, because the agency might question whether you underreported your income and assess additional taxes and interest.
Liveops issued a 1099-NEC indicating that my husband had earned just over $10,000 in 2021. They had the correct home address and his Social Security number, but he had never heard of this company. More later on how the company responded.
Knowing…
