Legal Question in Business Law in California

Am I responsible to give information?

I am a small buisness owner with a sole proprietorship. It is a child care center with approximately 71 children. At the end of every year we provide a statement that includes our tax identification number and the amount the parents paid us.

A parent has asked me for the information again because she never filed taxes from 2002 until this year. She has not paid all of the childcare herself. The state has paid for some and family members have paid for some. I broke it down for her and gave it to her at the end of each year. Since it requires a lot of time, referring to many old and various files to break it down, I told her that I could only provide her with 2005.

A person who is doing these taxes for her called me and told me that I was responsible for providing this again. The tax preparer said it was a federal law that I provide her with this and I had to keep the records for 10 years.

I was not under that impression that I was required to provide this or provide it after I already had merely because they were negligent in saving the information. I would assume that they had there own records by way of reciepts or cancelled checks.Please let me know my legal requirements if there are any.

Thanks


Asked on 2/17/06, 2:09 pm

1 Answer from Attorneys
Ken Koenen Koenen & Tokunaga, P.C.

Re: Am I responsible to give information?

I won't spend a lot of time researching this, but it is generally the responsibility of the payor (your customer) to keep records and they should be providing a 1099 to the payee (you) showing what she paid you. Remember that she could get audited, and then IRS could subpoena your records if she does not have them. You should be able to charge her for the time you need to take to find the information.

Read more
Answered on 2/20/06, 12:50 pm


Related Questions & Answers

More Business Law questions and answers in California