1099 Reporting. If any payments to vendors over $600, you must issue a 1099. Failure to do so can result in a fine per violation. This reporting is going to cause a lot of headaches and wasted hours filing reports. These are the requirements from the IRS website.
IRS FORM 1099 REPORTING REQUIREMENTS
The Internal Revenue Service (IRS) requires businesses (including not-for-profit organizations) to issue a Form 1099 to any individual or unincorporated business paid in excess of $600 per calendar year for services rendered. This is required whether these payments are spread out over the course of the year ...