In 2011, we bought out one of our partners in our partnership.  Instead of paying out all of the funds, we now have a $30MM Earn Out note to the former owner.  Each year on May 1st, this Earn Out note is paid to the former owner based on company earnings.  However, in the actual written note document the note does not have any interest which is due for the entire length of the note.  In 2011, our financial statement auditors had us discount this note and record a 5% notional interest expense related to this note.  Our question is: should this notional interest expense be included on the former owner's 1099-INT for 2012 since these funds were paid on May 1st 2012?

When a Medical vendor fills out a W9 form and they check the Corporation box, but then also write in 501(c)(3), which do we go by?  Is this vendor 1099 reportable?  Do they get non-profit exemption or are they treated as a corporation and no exemption?

We are an insurance company that is planning an incentive trip that agencies will qualify for with different criteria such as policy count and loss ratio.  Just wondering about a few things that hopefully you'll be able to help out with.

1. Would the agency be able to choose who would get the 1099 (i.e. agency, individual going on the trip,etc)?

 2. What box the amount will go into since the trip is based on the criteria (Box 3 or Box 7)?

 3. If the agency gets the 1099 - would they still get it if they are incorporated?

Form 1099 reporting on collateral assignment of nonqualified annuity.  For example a policy has $50,000 basis and a current value of $75,000, thus $25,000 is gain.  Client assignes the policy as collateral for a bank loan.  I understand this is a taxable event but need guideance on how to report.  What box(s) are used on the 1099?  I believe it's reported on the 1099R.  I don't think our tax reporting program allows box 2 to be greater than box 1 but since there isn't an actual distribution it seems box 1 would be zero.

An insured hires a Public Adjuster (on their behalf) to handle their claim  and we issue three party checks payable to our insured, contractor and public adjuster.  The Public Adjuster profits off the insureds settlement.

Do Non-Profit organizations have the same rules and regulations to follow as far as collecting W9 information and issuing 1099's to individuals and businesses that they pay over $600.00 in a calendar year?  If the Non-profit pays to individuals cash for events they win or awards for winning is that 1099 reportable?

Can you recommend what IRS publications would be benefical to read regarding Non-Profit organizations and taxes.

First of all, we are assuming that these are your teachers - meaning your employees as they are employees of schools we have chartered and founded. Thus, that we are really dealing with a W-2 type question here and not a 1099 question (for pay to non-employees). Please note that in the 1099 sense our recommendation is the same as it always is regarding any payments made to non-employees: that is you lump everything together you pay to them, report it all on the 1099, and let them handle the deductions on their own taxes. Ok, now back to educational fringe benefits as they apply to your employees. 

They are not our employees,  they are employees of the charter schools.   We only control the appointment of the board members and where the state appropriations go.  Whether that be to a management company or to the school themselves.  The schools have some financial and academic reporting requirements but they pay their teachers.  We just offer to our charter school teachers the ability of being reimbursed for their tuition.  So what type of payment should that be considered?

We charter several schools and receives an oversight fee from the state to charter these schools.   The charter schools office decided to use some of this oversight income to reimburse charter school teachers for the cost of the classes.  The classes that the charter school office will cover only occur at our university.   My question is whether we have a reportable payment for our university if we make the reimbursement check from our university to the charter school employee?

Non-qualified deferred comp was paid out starting in a prior year (2008) with no FICA remitted to the IRS by the employer for the former employees or the company.  What is the best way to correct this error?  The IRS has not made an assessment. 

Does the employer just start taking out the FICA going forward or should the prior years be corrected also.  Would the correction be to amend the W2s and 941s for the prior years and wait for the IRS to assess interest?  Can interest be "prepaid" with the FICA payment?  

I believe the employee would be able to avoid any penalties, as the employer would take responsibility for the error.  What is the likelihood that the employer could get penalty abatement, since a confession and correction was made once the error was discovered and before assessment? 

The employer will be paying both the employer and employee shares of FICA and reimbursing the employee for the interest costs.  This is obviously income to the employee.  Is this reported on the W2 with the non-qual deferred comp payments (made and administered by a third party on behalf of the employer) or should it be reported on a 1099-misc by the employer?  Thanks.

When we issue a multiple party check that would include a mortgage company and an attorney, would we be responsible for sending a 1099 to the attorney or would the mortgage company? The attorney would be representing our insured on a disputed claim.

Also, would we (the insurance company paying out on a claim) would need to send a 1099 to both the mortgage company and the attorney for the gross amount to both parties?

Even though we do not know a fixed or determinable amount of income for the mortgage company, there would still be a reporting obligation?