So it isn't entirely the fact that it's being reported in general, it's that it's being reported in Box 7 and so it looks to the IRS like it was a cash payment to a nonemployee and they're getting hit with self-employment taxes for it. At most I would think this would be reported in Box 3 and taxed normally, but they aren't out to make money in this effort so it doesn't seem to me that it should be subject to additional self-employment taxes. This is something they've been doing through Amazon Vine for more than 10 years, always for a similar amount of products, and this is the first time they've ever been sent any kind of form at all for it so they're understandably shocked.