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I have what seems am odd tax question
I had an experience in the past when someone screwed me out of some money, and there was really no way I could collect the money, even if I got a judgment against them. I ended up sending them a 1099, based on the idea that in effect I had "paid" them the dough. I don't really know how it turned out in the end for them, but heard second hand that this was the beginning of a lot of tax troubles for them. I was not the first person to have bad dealings with this party.
Now for the question.
My office manager just wrote off a BUNCH of billing for Medi-Cal, the California version of Medicaid, for patients that have it as a secondary insurance. This cannot be written off as a business loss. Question is, what would be the effect of my sending a 1099 to the state for the amount written off? It is a service I provided that they did not pay for. In the same situation with an individual, that is income to the person that got the "free" services. I realize the state does not pay taxes, so income does not impact them that way, but what would happen?
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She was the kindest person I ever met
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