Patient bad debts and IRS Form 1099

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.

Have questions? I’m here to help.

Categories
Accounting and Tax Services Litigation Support Managed Care Consulting Managed Care Contract Negotiations Medical Practice and Healthcare Entity Valuation Medical Practice Assessment Medical Practice Brokerage Medical Practice Embezzlement Consulting Medical Practice Management Medical Practice Merger Advice Medical Strategic Planning Newsletter Personal Financial Planning Oversight Physician Compensation Models Physician Compliance Physician Financial Management Services Retirement Uncategorized
About Reed Tinsley, CPA

As a top advisor to physicians, I help increase practice profits by delivering hands-on, expert medical accounting/tax support, practice counsel, and revenue-building strategies. Read More >

Reed Tinsley, CPA for Physicians