[PeterPrinciple]

, using tax information the IRS already has,

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When they started the 1099 requirement, they thought it would raise tax revenue. If you paid someone over $600 as a part of your business you had to file a l099. If you paid the plumber for you personal house you didn’t.

I had a carpenter that before this had revenues close to $100,000. After this we only got 1099’s showing he made $50,000 as the home owners never filed the 1099.

He filed his tax return based on what the government knew.

[kearnyirish2]

I’d think that could come back to bite him if one of his clients sells a home and claims the improvement to adjust the value of the home (to reduce the gain on sale); if the client can prove to the IRS that he paid the carpenter, the IRS may look into the payment (and open a can of worms).