1099 NEC for veterinary corporation

Technical topics regarding tax preparation.
#1
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Hi guys,

I'm little confused here.
My understanding is that you don't issue 1099-NEC to corporations unless it's a law firm or federal payments for vendors. This veterinary corporation that my client hired for outsourcing insist on getting a 1099-NEC since its CPA stated that they need to get one because they provide professional services. Is there any merit to what other CPA is saying?
 

#2
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No.

https://www.irs.gov/instructions/i1099m ... 4700018560
Reportable payments to corporations.
The following payments made to corporations generally must be reported on Form 1099-NEC.
Fish purchases for cash reported in box 1.
Attorneys' fees reported inbox 1.
Payments by a federal executive agency for services (vendors) reported inbox 1.
Dave

Taxation is the price we pay for failing to build a civilized society. ~ Mark Skousen
 

#3
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Maybe they are considering it a medical payments??? If that is the case, it would go on a 1099 MISC though.

Box 6. Medical and Health Care Payments
Enter payments of $600 or more made in the course of your trade or business to each physician or other supplier or provider of medical or health care services. Include payments made by medical and health care insurers under health, accident, and sickness insurance programs. If payment is made to a corporation, list the corporation as the recipient rather than the individual providing the services. Payments to persons providing health care services often include charges for injections, drugs, dentures, and similar items. In these cases, the entire payment is subject to information reporting. You are not required to report payments to pharmacies for prescription drugs.

The exemption from issuing Form 1099-MISC to a corporation does not apply to payments for medical or health care services provided by corporations, including professional corporations. However, you are not required to report payments made to a tax-exempt hospital or extended care facility or to a hospital or extended care facility owned and operated by the United States (or its possessions), a state, the District of Columbia, or any of their political subdivisions, agencies, or instrumentalities.
 

#4
Anderly  
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https://www.irs.gov/pub/irs-wd/1349013.pdf


Information reporting with respect to payments made to veterinary corporations
This Chief Counsel Advice responds to your request for assistance. This advice may
not be used or cited as precedent.
ISSUES
Do payments made by a taxpayer in the course of his or her trade or business to a
veterinarian operating as a corporation have to be reported to the IRS under Internal
Revenue Code (“IRC” or “Code”) § 6041?
CONCLUSIONS
Generally, yes. Payments made by a taxpayer in the course of the taxpayer’s trade or
business to an incorporated veterinarian must be reported to the IRS to the extent the
payments aggregate to $600 or more per year. Incorporated veterinarians are not
exempted from the reporting requirement by Treas. Reg. § 1.6041-3(p)(1) because
veterinarians are “engaged in providing medical and healthcare services” for the
purposes of Treas. Reg. § 1.6041-3(p)(1).
 

#5
Nilodop  
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Excellent! By extrapolation, we should deductvet bills as med. expenses, 213 be damned. :ugeek:
 

#6
Anderly  
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And take our pets as dependents!
 

#7
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If your pet is a Youtube star and provides all the household income, aren't you the pet's dependent?
 

#8
Nilodop  
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Deep. Yes, especially if it's a cat.
 

#9
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LOL. Thank you guys for clarification.
 

#10
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I love this board!
 

#11
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ManVsTax wrote:If your pet is a Youtube star and provides all the household income, aren't you the pet's dependent?

The pet cannot be a dependent or taxpayer due to the practical issue that the pet does not have a social security number. For an nonresident individual without an SSN, we can apply for an ITIN (Individual Taxpayer Identification Number), but that will require a copy of the passport. Does any country issue a passport for a pet?

In this case, the pet, a Youtube star, is considered as an inventory, or a tool, it does not enter into the tax system at all?
Please consider visiting this post where my question at the end has not been answered yet:
viewtopic.php?f=8&t=12065, thanks!
 

#12
Nilodop  
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In this case, the pet, a Youtube star, is considered as an inventory, or a tool, it does not enter into the tax system at all?. My Pomeranians never viewed themselves as inventory, nor would I have ever sold them. And they were surely not tools. But somewhere we learn that animals are personal property, but that does not mean personal-use property, if they are mainly youtube stars. You have no idea how much time we spent training them. I'd say they were tangible personal property used in a trade or business, eligible for 100% depreciation. What trade or business, you ask? Breeding, showing, marketing, advertising, etc. Way too much work to be called a hobby. :ugeek:
 

#13
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Shower thought...

Wouldn't it solve the looming OASDI funding issue if we were to levy SE taxes on all of these pet Youtube stars? I would guess many of them would form an S Corp rather quickly.

And then I guess we would then need to start paying social security and disability to pets that have credits. I guess it's only fair to use dog years when calculating benefits and eligibility...
 


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