If we send a memorial contribution in lieu of sending flowers for staff employee, should the payee receive a 1099? Payee is the business/vendor which the obituary requested contributions to be sent in lieu of flowers.

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The IRS Instructions for Form 1099-MISC say payments made in the course of your trade or business are reportable. A donation typically does not fit that definition. Generally, if you are not receiving any services in return for the donation, then it is not reportable.

But to whom was the donation made? What kind of organization is it? In our experience, “in lieu of” requests are often for donations to go to a nonprofit organization of some kind, e.g., the American Cancer Society or the American Diabetes Association, etc.  Payments made to tax-exempt organizations are not reportable. Though is that not the case here? Who exactly is the payee?

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