My step daughters Dad sends her money by depositing it in her checking account, He has his own business and sent her a 1099, She does not work for his company, and I always figured it was a form of support or an allowance, but he is trying to use her for a tax write off. What can she do other than pay the tax? My step son has the same thing, but he didn't get sent a 1099 and is on better terms with him than my step daughter... should he be reported to the IRS?

Unless he can prove that she performed some service for the company, then this would sound fraudulent. How old is she by the way?

SEC. 7434. CIVIL DAMAGES FOR FRAUDULENT FILING OF INFORMATION RETURNS.

(a) IN GENERAL. --If any person willfully files a fraudulent information return with respect to payments purported to be made to any other person, such other person may bring a civil action for damages against the person so filing such return.

(b) DAMAGES. --In any action brought under subsection (a), upon a finding of liability on the part of the defendant, the defendant shall be liable to the plaintiff in an amount equal to the greater of $5,000 or the sum of -- (1) any actual damages sustained by the plaintiff as a proximate result of the filing of the fraudulent information return (including any costs attributable to resolving deficiencies asserted as a result of such filing), (2) the costs of the action, and (3) in the court's discretion, reasonable attorneys' fees.

.. .

(d) COPY OF COMPLAINT FILED WITH IRS. --Any person bringing an action under subsection (a) shall provide a copy of the complaint to the Internal Revenue Service upon the filing of such complaint with the court.