Received 1099-MISC for defunct business. How to to report?

Forum|Forum|3 years ago
April 14, 2023
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I received a grant which was reported as a 1099-MISC with the EIN of my now-defunct business which was an S-Corp. Let's all it "Defunct Business." It has been absorbed into another S-corp with a new EIN.

I am thinking about just reporting the 1099 into my 1040 directly and paying the tax on the grant amount. I am not trying to avoid paying the tax. I just don't want to file a 1120s for the "Defunct Business" just to report one 1099-MISC.

Is this the right way to go or will the IRS come asking my old "Defunct Business" about the 1099-MISC?

Thank you.

S-Corp

ShirlynW

Would you clarify, did you file a final 1120 for the business?

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huyhuyAuthor

Thanks Shirlyn. The final 1120 for "Defunct Business" was filed in 2021. So it is closed. The grant organization made a mistake and put the old EIN on the 1099-MISC. It's too late to change that now so I thought I would just file the 1099-MISC with my 1040 and pay the tax on it since the S-Corp is a pass-through anyway. But now I have second thoughts because the IRS may not realize that.

ThomasM125

Since the 1099 form was issued in the name of the corporation, the IRS will not assess any tax to it, since S corporations do not normally pay income tax. So, the worse thing that could happen is they assess you as the shareholder tax based on the income, but that is unlikely as you are only tangentially associated with the corporation. In the event they did, however, they would likely send you an invoice for taxes due, to which you could respond regarding what happened and the matter would be quickly resolved.

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