Is a 1099 required for fees to enter a dance competition?

[MaryPMJ]

My client is a dance school and they pay fees to various venues to enter dance competitions. I cannot find a concrete answer anywhere on whether or not they should be issuing a 1099 to these venues. Any help is greatly appreciated!

[IRonMaN]

Sounds like they are operating a business and paying another business for services that business provides so I would vote to send a 1099.

[rbynaker]

This sparked a lively conversation on another list.

How were the payments made?  Cash, check, credit card, ACH, Paypal, CashApp, Venmo, Zelle . . . ?

[MaryPMJ]

The payments were made by ACH, some by check. - I wish they were made through 3rd party payer so I wouldn't have to worry about it!!!  

Can you link me to the other list? 

[PATAX]

In addition to what others said: What type of entity were recipient(s), i.e. c corporation, s corporation, etc.?

[rbynaker]

It's a private list on groups.io.  The discussion degraded pretty quickly when some folks refused to acknowledge that you don't issue a 1099 for payments already covered under the 1099-K rules (so nothing directly having to do with dance competitions).

I'm with IRonMaN, send 1099s.  I'm sure the client got all of the EINs, right? 🙂

[MaryPMJ]

Hi, nope not corporations. These are paid to various venues to have dance competitions. My opinion is no 1099 because the fee is used to cover many different expenses like utilities, supplies, etc. Maybe even a donation in some cases. I don't see how it can be justified that the entire fee is rent. 

[sjrcpa]

What do the venues call it?

Most people/businesses who collect rent use some or all of it to pay expenses.

If part of it is a charitable contribution, the venue/payee needs to say so.

[IRonMaN]

Did they get a detailed bill showing they were being charged for utilities, supplies, etc?