A corporate tax newsletter advises that wages and other compensation that were due to deceased employees—which in the past were reported as nonemployee compensation—should now be reported as "prizes and awards." "IRS computers will seek self-employment tax" on any nonemployee compensation, the newsletter explains. So employees will want to list any compensation to dead employees under the category "prizes and awards," although they "will obviously want to enclose a note with the 1099" explaining why the compensation is called a prize.

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