JJStephens Posted January 20, 2015 Report Share Posted January 20, 2015 Client purchases extensive time on a couple TV networks to air religious programming. Some of the payees are LLCs. Does that need to be reported on a 1099? I can't find anything in the 1099 instructions even remotely related. I'm inclined to say no, but have a nagging unease about it. Thoughts? Quote Link to comment Share on other sites More sharing options...
Pacun Posted January 20, 2015 Report Share Posted January 20, 2015 Issue a 1099 so you have accurate records. No need to research.... just issue the 1099s-misc. 2 Quote Link to comment Share on other sites More sharing options...
mcb39 Posted January 20, 2015 Report Share Posted January 20, 2015 To my knowledge, only Corporations are exempt. Quote Link to comment Share on other sites More sharing options...
JJStephens Posted January 20, 2015 Author Report Share Posted January 20, 2015 I truly appreciate your feedback. I know that corporations are generally exempt (there are a handful of exceptions). My question is if purchasing air time constitutes rendering a service or if it would be treated more like the purchase of merchandise (which is exempt). Quote Link to comment Share on other sites More sharing options...
Jack from Ohio Posted January 20, 2015 Report Share Posted January 20, 2015 Client purchases extensive time on a couple TV networks to air religious programming. Some of the payees are LLCs. Does that need to be reported on a 1099? I can't find anything in the 1099 instructions even remotely related. I'm inclined to say no, but have a nagging unease about it. Thoughts? Issue a 1099 so you have accurate records. No need to research.... just issue the 1099s-misc. I truly appreciate your feedback. I know that corporations are generally exempt (there are a handful of exceptions). My question is if purchasing air time constitutes rendering a service or if it would be treated more like the purchase of merchandise (which is exempt). Pacun has the correct advice. 1 Quote Link to comment Share on other sites More sharing options...
Abby Normal Posted January 20, 2015 Report Share Posted January 20, 2015 The W9 now asks whether the LLC is taxed as a partnership or a corporation. The reason the IRS added that was so you save issuing 1099s to entities that are essentially a corporation. So the answer to your question is (as always), it depends. 1 Quote Link to comment Share on other sites More sharing options...
jklcpa Posted January 20, 2015 Report Share Posted January 20, 2015 The W9 now asks whether the LLC is taxed as a partnership or a corporation. The reason the IRS added that was so you save issuing 1099s to entities that are essentially a corporation. So the answer to your question is (as always), it depends. This is actually the most correct answer to the original question. The W9 will tell you whether you have to consider issuing a 1099 and also taking into consideration the amount paid. If the amounts paid include services and merchandise, the total of all payments is reported and it is then up to the recipient to report the components of that income in the proper manner. I did not look this up but would venture that this air time is not merchandise and is more in line with advertising services similar to yellow pages advertising where the payor isn't purchasing the book that the advert is published in, the payor is having the ad published and distributed. Quote Link to comment Share on other sites More sharing options...
JJStephens Posted January 20, 2015 Author Report Share Posted January 20, 2015 Thanks all. I totally understand the corporation/not-a-corporation thing (including the LLC taxed as a C or S-Corp). I added the LLC info to my OP because I assumed many of you would assume (as I did) that many of the payees would be corporations and therefore, exempt. I simply wanted to indicate that a couple of them are LLCs and therefore would be eligible. My question is exclusively whether paying for air-time is reportable. I can make a case for it being 'like' some things that are reportable and also 'like' some things that are exempt. I do appreciate Pacun's counsel to just report and be done with it, but this client is wary of volunteering any info to the guvment that is not absolutely required. PS While this query was pending, I decide to give uncle a call on the practioners' hot line. I got a recording saying (I paraphrase) 'this line is no longer answered by a live representative. Go to the IRS website for answers to your every question.' Quote Link to comment Share on other sites More sharing options...
BulldogTom Posted January 20, 2015 Report Share Posted January 20, 2015 (edited) JJStephens, The answer is on the W9 that they give you. Send the recipient a W9. If they don't indicate that they are an exempt payee, send the 1099. If they are exempt, they will tell you. I run into this all the time. "Why did you send me a 1099?" My answer, "Because that is the way you filled out the W9." Some vendors don't want to give a W9. My response "Then I have to take 28% of your payment and give it to the IRS. Without a Tax ID number to match it to, good luck getting it back from them. But if you give me a W9 and it says you are an exempt payee, then I will not issue a 1099. This is your choice." This works like a charm. Tom Newark, CA Edited January 20, 2015 by BulldogTom 3 Quote Link to comment Share on other sites More sharing options...
JJStephens Posted January 20, 2015 Author Report Share Posted January 20, 2015 Garsh, now why didn't I think of that?!?! That is what I've historically done ... it never even crossed my mind this time. Quote Link to comment Share on other sites More sharing options...
rfassett Posted January 20, 2015 Report Share Posted January 20, 2015 JJStephens - I would tend to buck what seems to be the consensus. I believe the purchase of air time is a product and it does not warrant the issuance of a 1099. I don't have a cite. But I could put together a pretty convincing argument if it came up. I would not issue a 1099 for the purchase of advertising spots either. If I had someone design the ad for me, the I would issue a 1099 for that service. In the present case, if I am paying someone to do something inside that airtime, I most likely would issue a 1099 (or W-2 if warrant). But I do not believe the act of just purchasing airtime warrants a 1099. Quote Link to comment Share on other sites More sharing options...
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