Any contractor making >= $600 have to fill the payment and they receive a 1099.
There are very few exceptions to that and they are listed in the article.
Yes, you do.
Being able to associate != hiring someone for a job
If you need to pay your friends >$600 to hang out with you, you should probably re-evaluate your life.
To me, it seems as absurd as having to file a report with the government on anyone you meet. I can see justification in narrow cases, but requiring it universally seems ridiculous to me.
However if they believe you are a USA citizen or reside in the USA while doing the work, then they are supposed to.
If the contractor fails to furnish a TIN, you are not required to cease business with them, however you will likely have to respond to the IRS and show that they refused to tell you when you file the 1099s each year.
The IRS can assess a $50 civil penalty against the contractor (doubt they bother due to low amount set in statute), but more importantly the employer must withhold 30% backup withholding due to the failure to provide TIN. The employer will have to report the income and withholding on their tax return, which will likely be held up while the IRS verifies the match.
I-9/E-Verify is for employees of your entity only and is not completed for independent contractors, nor for temp/contract labor who is employed by a different company (they do the form).
The part about the 1099 reporting does agree with the parent comment, however, added some additional context about what happens if the contractor refuses and what exactly the business's responsibility is, which I thought was relevant to this discussion.
"businesses that contract with S Corps do not need to issue them a Form 1099-MISC"
I'm an s-corp, and yet I still have people 1099ing me. It's more annoying than anything because I get all my tax stuff done quickly, and someone will send out a late 1099 with slightly different numbers (typically error on their end) and... I've just given up caring about that.
"You don't send 1099s to your landscaping service, or your office supply store purchases, or the energy company, but you've contracted services with them." "Oh, but you're a person"... with an s-corp registered for 10+ years and a separate employer TIN.
