I am looking for an answer from a certified tax professional or CPA. I just received a notice from the IRS saying I owe taxes on a 1099 submitted by my home builder. The home builder did in fact write a check to me, but I in no way did any work for them. I was supposed to close in May and my lease was up at the end of that month. The builder was unable to keep this agreement and I ended up paying an additional $600 rent on top of the $1000 I paid during my lease for the additional month. So instead of making a mortgage payment, I had to pay $1,600 in rent. Then, while I was moving in, I realized they didn't build my laundry closet deep enough. The builder offered to buy a new washer and dryer that would fit the space, but it was determined it was so narrow that there wasn't anything on the market that would fit. So, down came a whole wall, construction dust and mess everywhere and the whole project took 2 weeks. Several trips to the laundromat and many hours of cleaning up dust = unnecessary headache. Not to mention hours of waiting for contractors to show up or not show at all some days. The builder said they would pay to compensate for the additional rent I owed at their mistake and the extreme inconvenience of the laundry closet situation. So, they 1099'd me and now I owe $700 in taxes… More than a third of what they paid me. Is this right?
Read more: Should I have been 1099'd by my home builder?
