Skill: vendor-compliance-1099

Description

1099 vendor compliance pipeline for accounting firms. Pulls the full-year General Ledger from QBO, aggregates vendor payments by name, applies IRS $600 threshold, classifies 1099-NEC vs 1099-MISC, checks corporate exemptions, tracks W-9 and TIN status, filters credit card payments (1099-K handled by processor), calculates late-filing penalties, and produces a year-over-year CDC. Outputs an 8-tab Excel workbook.

Trigger phrases: "run 1099 compliance," "vendor 1099 check," "pull 1099 list," "who needs a 1099," "1099 vendor scan," "W-9 tracker," "1099-NEC list," "1099-MISC list"

NOT for: payroll W-2 compliance, 1042-S foreign withholding, 1099-K reconciliation (CC processor), or non-US entities.

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Pipeline Location

CODEBLOCK0

Usage

CODEBLOCK1

Arguments:

Flag	Required	Default	Notes
INLINECODE0	✅	—	QBO client slug
INLINECODE1

✅ | — | Tax year (e.g. 2025) |
| --sandbox | ❌ | false | Use QBO sandbox |
| --skip-gl | ❌ | false | Skip GL pull (empty output — testing only) |
| --out | ❌ | ~/Desktop | Output directory |

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Output: 8-Tab Excel Workbook

Tab	Contents
Vendor Summary	All vendors: total paid, ACH/check/wire vs CC split, form type, corp exempt flag, action required
1099-NEC List

Contractors/service vendors ≥$600 (reportable amount only), W-9 status, TIN status, action |
| 1099-MISC List | Rent, royalties, prizes ≥$600 with MISC box classification (Box 1/2/3/6/10) |
| Exemptions | Corp-flagged vendors (LLC/Inc/Corp/Ltd) requiring manual entity-type verification before skipping 1099 |
| W-9 Tracker | Per-vendor W-9 received/pending/missing status; persisted between runs; editable date/TIN fields |
| Payment Methods | ACH/check/wire vs. credit card split per vendor; CC excluded from 1099 reportable amount |
| Penalties Calc | IRC §6721/6722 penalty scenarios: on-time, 15/30/45/60/90 days late + today's actual exposure |
| CDC Log | New vendors (not in prior year), dropped vendors, amount changes ≥10% or ≥$500 YoY |

Output filename: VendorCompliance_1099_{slug}_{year}.xlsx

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Key IRS Rules Implemented

$600 Threshold

• - Applied to ACH/check/wire amounts only — credit card payments excluded (processor files 1099-K)
• Threshold is per-vendor, full calendar year aggregate

1099 Type Classification

Form	When	Keyword triggers
1099-NEC	Non-employee compensation: contractors, consultants, attorneys, sole proprietors	contractor, freelance, consultant, attorney, repair, cleaning, design, etc.
1099-MISC

Rent, royalties, prizes, medical payments | rent, royalty, prize, award, medical, healthcare |

Default is 1099-NEC — NEC is assumed for all service payments unless account/memo indicates MISC category.

Corporate Exemption

• - Vendor names matching LLC|Inc|Corp|Ltd|Co.|Company|etc. → flagged as potentially exempt
• Still appear in Exemptions tab for manual verification
• Exception — always file regardless of entity type:

- Attorneys (IRC §6045(f)) → 1099-NEC - Medical providers → 1099-MISC Box 6

Payment Method Filter

• - Credit card keywords in memo/txn_type/split → classified as CC, excluded from reportable amount
• ACH/check/wire → included in reportable amount
• Unclassified payments → included (conservative — better to over-report)

W-9 & TIN Tracking

• - W-9 status persisted at INLINECODE7
• New vendors auto-default to NO status
• TIN status persisted at INLINECODE9
• Backup withholding: 24% applies if vendor fails to provide valid TIN

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Filing Deadlines

Form	Recipient Copy	IRS Paper	IRS e-File
1099-NEC	January 31	January 31	January 31
1099-MISC (Box 7)

January 31 | January 31 | January 31 | | 1099-MISC (other boxes) | January 31 | February 28 | March 31 |

e-File required if filing 10+ information returns.

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Penalty Rates (IRC §6721/6722 — 2024)

Days Late	Per Form	Small Biz Annual Cap
≤30 days	$60	$232,500
31–60 days

$120 | $664,500 |
| >60 days | $310 | $1,329,000 |
| Intentional disregard | $630 minimum | No cap |

Small business = avg annual gross receipts ≤$5M for 3 prior years.

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Cache Files

File	Purpose
INLINECODE10	YoY snapshot for CDC (auto-saved each run)
INLINECODE11

Prior year snapshot for comparison |
| .cache/vendor-compliance-1099/{slug}-w9.json | W-9 status (persisted, editable manually) |
| .cache/vendor-compliance-1099/{slug}-tin.json | TIN status (persisted, editable manually) |

Updating W-9 status manually:

# Edit cache file directly to update W-9 status
cat .cache/vendor-compliance-1099/my-client-w9.json
# Modify "VendorName": "YES" | "NO" | "PENDING"
# Then re-run pipeline — status will be loaded automatically

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Integration Requirements

• - QBO Client: Node.js QBO client (auth token must be set)
• Python packages: INLINECODE14
• GL access required: Pipeline reads full-year GL — ensure QBO auth has GL report access
• No write access to QBO — read-only integration

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Decimal Math

All financial calculations use Python Decimal with ROUND_HALF_UP at 2 decimal places. No float arithmetic. Same pattern as tax-package-prep.py and pl-deep-analysis.py.

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When NOT to Use This Skill

• - Payroll / W-2 compliance → separate payroll workflow
• 1099-K reconciliation → CC processor provides (not Sam's responsibility)
• Foreign vendor withholding → Form 1042-S, different rules
• State-level 1099 filing → varies by state, not covered here
• 1099-INT / 1099-DIV / 1099-B → investment/bank-issued, not vendor compliance

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Workflow Checklist

Run this pipeline as part of year-end close:

1. 1. November/December: Pre-screen — run pipeline to identify missing W-9s before year-end
2. January (early): Final run — full year GL aggregation
3. January 15: W-9 collection deadline (internal)
4. January 25: Prepare and review filings
5. January 31: File 1099-NEC (recipient + IRS)
6. February 28 / March 31: File 1099-MISC (IRS paper/e-file)

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