How do you know if a company should receive a 1099 form? What are the rules to be eligible?

Answer 1

Check the IRS web site. 1099's are generally given to consultants and contractors for services rendered. We do consulting work and 99% of the business send us 1099's but we also report all of our income we don't skimp.

Answer 2

When I was in charge of a Fraternal Organization I sent 1099's to all of the individuals that were not direct employees of the club. This included musicians, guard services and occasional laborers. Taxes were not withheld from their checks issued when they did work for us. They are responsible for all taxes and deductions such as Social Security and Workmans Comp.