Rev. Rul. 80-32
1980-1 C.B. 287, 1980-5 I.R.B. 8.
Internal Revenue Service
Revenue Ruling
INFORMATION RETURN; POWER COMPANY; PAYMENT FOR USE OF THE ROADS
Published: February 4, 1980
26 CFR 1.6041-1: Return of information as to payments of $600 or more.
Information return; power company; payment for use of the roads. A power company that paid an individual $3,000 for the unrestricted use of certain roads on the individual's farm for a 10-year period is required to file a Form 1099-MISC reporting the payment.
ISSUE
Must a company that pays, in the course of its business, $3,000 to an individual for the unrestricted use of certain roads for a ten-year period file a Form 1099--MISC, Statement for Recipients of Miscellaneous Income, reporting the payment?
FACTS
A power company paid $3,000 to an individual for the unrestricted use of certain roads on the individual's farm for a ten-year period. The agreement entered into by the company and the individual giving the company unrestricted use of certain roads was entitled 'Lease Agreement' and characterized the $3,000 payment as rent.
LAW AND ANALYSIS
Section 6041(a) of the Internal Revenue Code requires the filing of information returns by all persons engaged in a trade or business and making payment in the course of such trade or business to another person of rent, salaries, wages, premiums, annuities, compensations, remunerations, emoluments, or other fixed or determinable gains, profits, and income of $600 or more in a taxable year.
Section 1.6041-1(a)(2) of the Income Tax Regulations provides that the return required by section 6041(a) of the Code shall be made on Forms 1096 nd 1099.
A payment by a person engaged in a trade or business in the course of such trade or business of rent of $600 or more in any taxable year is one of the types of payments specifically mentioned in section 6041(a) of the Code.
HOLDING
The company is required to file a Form 1099--MISC.
Rev. Rul. 80-32, 1980-1 C.B. 287, 1980-5 I.R.B. 8.