I was in a collection agency partnership (LLC) with a CPA. He obviosly was the Tax Matters Partner who was majority owner 51/49. I was paid as contract labor as President of the LLC. I decided to resign in Jan 2012 and he retaliated by filing a false 1099 for 2011. He overstated my income by $25k. Looking at the General Ledgar he adjusted amounts from "collection expenses" (100% valid via bank statements) and added them too "contract labor" in addition he has lumped in amounts labeled "general journal" and when i try to match the amounts and dates w/ whats on the bankstatemets its not adding up. He refuses to correct the 1099 and refuses to give me any back-up as to the amounts labeled "general journal". I am thinking that he has no back-up and is banking on me to just accept it. Isn't it illegal to file a false 1099 and represent to the IRS that I had more taxable income than I received? I know I need to itemize my income to show the truth. Is there a form I need to fill out? Is there a way that I can use the IRS to make him validate his 1099?

Also, in 2010 he did my personal tax returns. He 1099 me for the collection work I did for his CPA firm but not our LLC ($5k worth).He told me at the time that since he is taking 100% deduction for profit and loss that he didnt have to 1099 the $5k to me even though the LLC 2010 return shows the $5k as contract labor.[B]Do I need to amend the return? How would the IRS view him intentionally not reporting the $5k? Was it illegal for him not to report?[/b]

“Isn't it illegal to file a false 1099 and represent to the IRS that I had more taxable income than I received?”===========>Defnitely; if you explain the situation to the IRS and can submit documentary evidential proof that he overstated my income by $25k on 1099, and will not correct the intentional error appears to be an indication of filing a fradulent information return as well as a negligent willful intentional disregard for the Internal Revenue Code and underlying Treasury Regulations.If you do not get anywhere with the normal customary communication process, there is a Taxpayer Advocate that ensures problems and issues are resolved promptly and impartially handled when the "normal" communication process fails. Here is the link: TAS - Your Voice at the IRS
IRS Form 4598 is titled "W-2 or Form 1099 not received or incorrect". This appears to be the form the IRS sends to the payor when there is a discrepancy or no form filed. You may fill out this form and attach it to the tax return. Maybe sent a copy to the payor prior to filing the return in hopes the payor would correct the form.
“ I know I need to itemize my income to show the truth. Is there a form I need to fill out? Is there a way that I can use the IRS to make him validate his 1099?”==========>As sad above.

Also, in 2010 he did my personal tax returns. He 1099 me for the collection work I did for his CPA firm but not our LLC ($5k worth).He told me at the time that since he is taking 100% deduction for profit and loss that he didnt have to 1099 the $5k to me even though the LLC 2010 return shows the $5k as contract labor.Do I need to amend the return? “==========>I guess so; you should file an amended tax return if you need to correct any piece of information that will alter your tax calculations. You can use an amended return to make corrections to your filing status, dependents, income, deductions, or tax credits. For example, if you need to report additional income from a 1099 that arrived after you filed your original return, you'll need to file an amendment; revising your tax return is done by filing an amendment. You need to use Form 1040X, along with a new Form 1040, plus any other necessary schedules and forms. Amended tax returns have to be mailed to the IRS on paper for manual processing.
“How would the IRS view him intentionally not reporting the $5k?”======>It is tax evasion; tax evasion occurs when a person, company, or other entity uses illegal means to avoid paying taxes. According to the definition of tax evasion, the person already owes the taxes at the time of the illegal conduct. Income tax evasion does not concern taxes that might be owed in the future. Typically, a taxpayer purposely misrepresents certain facts about his or her financial situation to agencies such as the IRS or state taxing authority in order to reduce his or her tax liability. One way of carrying out tax evasion is dishonest tax reporting, such as failing to report all of a person’s income on a tax return or overstating deductions on a tax return. The goal of these illegal tactics is to gain a lower tax liability for that particular taxpayer. The Criminal Investigation Division of the IRS is responsible for investigating all tax-related crimes. One of the major areas of financial investigation is legal source tax crimes, which includes tax evasion. The crime of tax evasion is considered a legal source tax crime because it typically involves a legal job or business, and income that a person has earned legally. Tax evasion also is referred to as white-collar crime, since it is a financial violation that is committed by a person who usually is not engaged in any other types of criminal activities. CID devotes most of its resources to legal source tax crimes.

“ Was it illegal for him not to report?”=====> Penalties for tax evasion are among the harshest penalties a person can be charged in relation to tax issues. The maximum penalties can be up to $100K for individuals and $500K for corporations. Other possible consequences are up to 5 years in prison and a felony conviction. Please contact the IRS ASAP for more info in detail.