[CuriousGeorge2]

I know a 1099 is needed for anyone paid over $600, but what if, for argument sake, one cannot 1099 the contractor because they refuse or don't have a SS#, etc. What are the penalties for this beside not being able to expense the transaction? What does the IRS do?

[MukatA]

You were required to get W-9 from the contractor before making the first payment.

[MLSNC]

In most cases it is $50 for each 1099 not filed. I believe the Service can also fine you an additional $50 if you do not have the Soc. Sec. No. In that case it would be $100 for each 1099 not filed. However, a flagrant violation could result in additional penalties. And by not having the W-9 with the Soc. Sec. No. the IRS may argue the you should have withheld taxes on the payments (backup withholding) and now they want their money.

[kfoltz]

You should have requested the information necessary to complete the 1099, when you hired the person to do the workand not after-the-fact. If you were audited, I think the penality is not very severe for non-reporting a 1099. It could be under $100 per occurrence.