What is the origin of the mistaken belief that lawyers must be issued a 1099 for annual amounts less than $600?

The misunderstanding that lawyers must be issued a 1099 for payments under $600 likely stems from a misinterpretation of the IRS reporting requirements. According to IRS rules, businesses are generally required to issue a Form 1099-MISC for payments made to non-corporate entities, including legal services, if the total amount paid over the year is $600 or more. However, when it comes to payments for legal services, this requirement applies regardless of whether the total annual amount exceeds $600 or not. Additionally, there is a specific exception in the case of reporting requirements pertaining to legal services: even if the lawyer is part of a corporation, the $600 threshold is irrelevant, and 1099-MISC forms must be filed for payments made. This can lead to confusion, as it deviates from the standard threshold applied to most other non-corporate service providers. The misunderstanding might also be influenced by the fact that tax reporting and compliance regulations are complex and change over time, making it challenging for businesses to stay current with specifics in regulations.