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Can I issue a 1099 to patients who have not paid for services or have not honored payment arrangements in lieu of sending to a collection agency?

What is the procedure?

chrisgummerson · Posted: Wed May 25, 2011 4:15 pm Post subject:

A 1099 is income that a person earned, whether it was from independent contractor work, gambeling winnings, interest from dividend or housing interest, and you can also receive a 1099 for the deficiency when you foreclose or sell your home for less than its worth. So if someone owes you money, you can send them to collections, or place a mechanics lien on their real property if they own any. A 1099 would be income earned, not owed (except for the IRS, and Deficiency judgements, as they treat a loss as income to the person)

smithsussane · Posted: Wed May 25, 2011 10:11 pm Post subject:

Hi Dr Gary!

Welcome to forums!

You can charge off the unpaid debts of your patients and assign it to collection agencies. But I don't think you will be able to issue a 1099 form to them for the same. Nevertheless, you should contact a tax adviser and he will assist you further in this matter.

Feel free to ask if you've further queries.

Sussane

gmakerley · Posted: Fri May 27, 2011 11:45 am Post subject:

I am in full agreement that it is not feasible for you to issue a 1099 to a patient for an unpaid debt. After all, a 1099 form is designed to provide evidence of income earned for a person. As Sussane noted, charging off your unpaid accounts and turning them over to collections is the appropriate way to go.

I'd like to think that you'd originally thought of seeking your accountant's advice, but I have reached the conclusion that I was using wishful thinking in this case.

If you consider yourself someone's employer who owes you money, then your college years were probably pretty much wasted.

gmakerley · Posted: Fri May 27, 2011 11:47 am Post subject:

Let me amend my last statement, to read as follows:

If you consider yourself someone's employer because they owe you money, then your college years were probably pretty much wasted.

Note the bold type reflective of changes made.

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