If an individual is requesting that a payment be made payable and sent to a third party, is the payment reportable to the individual or to the third party?

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When the beneficial owner of income (the individual performing the services) requests that the payment for his services be made payable to and sent to a third party, he is "assigning the income" to the third party. According to the IRS, the payment would still be reportable to the beneficial owner because he is the actual service provider.

For example, if an individual requests that a royalty payment be made payable to and sent to his university, the payment would still be reportable to the individual, who is the beneficial owner. The individual must also claim the payment as income on his income tax return. See "1099: Assignment of Income and Middleman Regulations" on TAPN.

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