The rules state that if someone pays an unincorporated entity more than $600 during the year, they are supposed to issue a 1099-Misc form to that person, and send a copy to the IRS. (Lawyers and healthcare providers are supposed to get 1099s as well even if they are incorporated.)

If the person will be reporting the correct amount, and you report all your income to the IRS, then I don't think it's an issue.

He's obligated to send you a copy of the 1099 he prepares. So make sure that he doesn't overstate the income being reported to the government.

It appears that this "problem" customer is just trying to stick it to you a little - just in case you had any thoughts of not paying taxes on the money he paid to you.

Zip Code: cpa@mdtaxes.com