Mon 15 Jul, 2013 03:10 pm
I live in the US. I do contract work for several companies and of course get a 1099 form at the end of the year. Recently a friend of mine recommended my service to another company based in Canada. I was curious if they would 1099 me like the US Companies do? An accountant friend of mine of course said you have to claim all earnings but how does the US Federal Gov know you have done contract work for a company out of the country?
I cannot tell you is the Canada Revenue Agency shares information with the IRS. However, i would suggest that you do a search with the criterion: "Canada Revenue Agency+1099 reporting" to see what comes up. You might also send an e-mail to the Canada Revenue Agency to get information.
Click here to visit the Canada Revenue Agency's "Contact Us" page.
Note that under the second rubric, "Telephone" there is a link for "International Tax and Non-resident inquires." I advise that you start there.
Thank you very much for your help! I will contact them first thing in the morning!
Since Form 1099-MISC is a US tax form, you can understand why non-US companies do not issue them. Nevertheless, your accountant is correct that you must report and pay tax on your worldwide income. Cheating by underreporting income to the IRS is not worth the penalty for getting caught. IRS detection is fairly easy; the IRS has access to bank information -- including foreign banks.