Question about 1099s

[snarkstress]

Hello!

I work for a company where, for several years, I was considered an Independent Contractor and received a 1099 at the beginning of the year to reflect my earnings. As of 2010, they changed our classification from IC to "Customer" and we signed a contract where it states, in part; "Further, Customer acknowledges that Service Provider is not obligated to report Customer's earnings to any governmental agency and that Customer is solely responsible for reporting any income earned to the appropriate state and federal authorities."

Yet I'm still receiving a 1099 every year for anything I've earned.

Does this sound correct? Should they still be sending a 1099 when I'm no longer an IC and am, in fact, in their words, a customer now?

Thanks for all your help!

[Evan]

Uh, it doesn't make sense ever for a company to be "paying it's customers". In that case, who wouldn't want to be a customer.

That language I also believe violates Federal law, so the US Government says they must report payments to vendors over $600. Whether your contract says they have to or not doesn't matter -- the fact is US law requires them to do this or they can be imposed a penalty.

[jim.sklansky]

definitely. you r right. penalty is applicable.

[Freelancier]

Even if they call you a "bee" or a "garbage truck" or even an "employee", if you have a relationship that looks like an independent contractor with them in the eyes of the IRS, they had better file a 1099 for you if you are paid more than $600.

[MyITGuy]

That language I also believe violates Federal law, so the US Government says they must report payments to vendors over $600. Whether your contract says they have to or not doesn't matter -- the fact is US law requires them to do this or they can be imposed a penalty.

Isn't there an exception that a 1099 doesn't need to be provided if you are paying a corporation (With only a handful of exceptions that override this statement)?