Please see TAPN's article 1099: Assignment of Income and Middleman Regulations, in the Compliance section under 1099 Reporting. This article is based on information provided by Marianne Couch, Esq. Specifically, see the last section, "Liens, Levies, and Garnishments." Generally, the 1099 (just one) still goes to the vendor, who is the "beneficial owner" of the income. However, if part of the payment goes to an attorney, that must also be reported. See IRS Instructions for Form 1099-MISC and search "attorney" for guideline on reporting payments to attorneys.
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