Exemptions and Exempt Recipients

I am paying a Settlement of Property Damages to the claimant. The Claimant is Incorporated. Do I issue a 1099 reportable?

There are two issues here. . . .

Situation: Vendor is paid twice a month throughout 2009 as an individual with a SSN on record. The vendor cashes the payments as is. At year end, 1099MISC is sent out with the vendor name and SSN. The vendor now calls saying the 1099MISC is incorrect and supplies new W9 for a corporation. Questions: 1. The payment was made to and cashed by the individual. Should I correct the 1099MISC to the corporation and now not report to the IRS (corp exempt-vendor is not med or legal) even though the payments show as going to the individual? 2. Does the vendor need to provide when the name change and status change occurred? I ask because if the name change does not apply to the whole year, would there be reporting for the time in 2009 that the vendor was not a corp, assuming over $600 was paid to the vendor during that time?

First, you always need to r . . .

I have several vendors that wish my company to "correct" their 2009 1099MISC from a personal name to a Corporation. The payments were cashed under the personal name, but I have not filed with the IRS yet (extension taken), so could make the change without penalty. But what information should I request to verify that the change is legitimate rather than a way to avoid paying taxes? Is anything required to document why the change was made should I be audited by the IRS? Assuming the change is valid and multiple payments were made throughout the year, do I need to process two separate 1099MISC depending on the timing of the change from old entity to new?