Written by Reed Tinsley |
September 19, 2007
The Truth About Sending IRS Form 1099 to Patients for Bad Debt
Many practices want to send a patient a Form 1099 when they write off their account as a bad debt; they do this as a way to get the patient to pay something. However, you cannot do this.
IRS Form 1099-C cannot be used unless you are a lending institution per their rules, not anyone's opinion. As you can guess, a practice could be in a bind from sending a person a 1099 when they aren't legally allowed to per IRS regs. Also remember this: if you send someone an incorrect or fictitious 1099-Misc, you could get in a load of trouble.
About the Author
Reed Tinsley CPA
This article is written by Reed Tinsley, a Houston, TX-based CPA with over 30 years of experience advising physicians and medical practices across Texas and the United States. Reed holds certifications as a Certified Valuation Analyst (CVA), Certified Healthcare Business Consultant (CHBC), and Certified Financial Planner (CFP), specializing exclusively in the healthcare sector. He is a published author, nationally recognized speaker, and trusted advisor to physicians on
accounting & tax,
practice management, and
financial planning.
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