1099s Made Simple: Who Gets One, Who Doesn’t, and How to Avoid IRS Headaches

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Special Trivia Question!

This blog post mentions earlier two exceptions where you need to file a 1099-MISC to a corporation (attorney fees, and medical/health care payments). What is a third exception?

A. Payments to a clown for working for your kid's birthday party
B. Fish purchases for cash
C. Payments for illegal activities, such as the purchase of illegal drugs
D. Purchases at garage sales and flea markets.

B. is the correct answer! According to General Instructions for Certain Information Returns (2025), you must issue a 1099-MISC for Fish purchases for cash.

Most likely, this rule is in place because of problems with compliance in a cash-heavy industry.

Also, the IRS isn’t very good at biology, so they count other aquatic life such as lobsters in the fish category.