Issuing a fraudulent 1099 can cost lots of money.
AN example of this was recently brought forth. A doctor received from the owner of his medical practice a 1099 form that reported an inflated amount of income. The doctor then filed a lawsuit in federal court. He accused the issuer of willfully filing a false information return with the Service.
The jury returned a verdict in the doctor’s favor and left damages to the judge. Now, the court has determined that the doctor is entitled to compensatory damages of $180,000. The defendant claimed that the minimal award of $5,000 under the tax statute was sufficient, but the court instead took into account the doctor’s actual damages plus attorney fees
Angelopoulos v. Keystone Orthopedic Specialists, N.D. Ill.