Why did I receive a 1099 for items that were purchased from my online e-commerce store?

[snick1899]

A company purchased products from my online store and sent payment via check made payable to my business. They also sent me personally a 1099-NEC for the items they purchased under my name and SSN. They said since they sent me money they have to send me a 1099. Is this correct? Should I be receiving a 1099 for their ecommerce purchase?

[AliciaP1]

No that is not correct.  You (or your business) should not receive any type of 1099 reporting payments made for goods purchased nor are individuals required to report 1099s at all.  You need to contact the issuer again and ask them to void the 1099.

Per the IRS, Form 1099-NEC is issued "for each person in the course of your business to whom you have paid the following during the year":

• Services performed by someone who is not your employee
• Cash payments for fish (or other aquatic life) you purchase from anyone engaged in the trade or business of catching fish
• Payments to attorneys (including law firms or other providers of legal services)

See here for the payments in the course of your business that require filing a Form 1099-MISC.

[snick1899]

Thank you for the quick reply! I reached out to them and they maintain that, since they sent me money in 2022, they have to send me a 1099. Do I just not include that with my tax filing? And can that have any negative impact on me if I do not and they refuse to void it? 

[AliciaP1]

Since the 1099 represents income to you (your business) anyway, you will still report it on your business tax return (whether a separate return or Schedule C whichever applies to your filing requirements).  If you receive a query from the IRS, you are in good shape because you have reported the income.

But - it's a good idea to cover your bases because the 1099 should not have been issued at all.  I would recommend writing a formal letter, siting the requirements for sending a 1099 that I noted in my previous post, and mail it via certified mail.  Keep a copy of the letter with your tax documents for 2022.