A Pure Romance Consultant is considered an independent contractor and not an employee of Pure Romance. Therefore, the corporate office does not issue a W-2 form. Pure Romance is required by federal law to report to the IRS and to send you a 1099 form when you file.
For 2020, the IRS has adopted additional regulations pertaining to the reporting and distribution of the form 1099. Pure Romance is required to issue a 1099-NEC (non-employee compensation) for any taxable value issued throughout the course of the calendar year 2020. Form 1099-NEC will report one accumulated balance, in box 1 of the form, for all forms of compensation.
In addition to the 1099-NEC forms, Pure Romance also has a requirement to report to the IRS any individual who has purchased more than $5,000 of retail products for resale. This reporting requirement is required to be issued to each consultant on a 2020 form 1099-Misc. This disclosure will come in the form of a simple check box in box 7 of the 1099-Misc form, which will indicate to the IRS that this individual is in the business of selling retail products for profit. Any consultant who qualifies for both the 2020 1099-NEC and the 1099-Misc, will receive both forms separately.
Federal law requires that 1099 forms will be mailed/postmarked to eligible US and Puerto Rico Consultants no later than January 31st. Consultants must report all income or loss activity to the federal government, by filing an income tax return each year. Pure Romance is unable to supply a breakdown of profits for the year, as we do not have visibility to consultant’s third-party sales to their customers.
Incentive Requirements Guide: 15.2
Pure Romance is required by federal law to report to the IRS and to send you a 1099 form when you:
- Purchase more than $5,000 at wholesale prices (which is defined as Retail minus your Buying Discount).
- Received any trips, gifts, prizes, awards or Override Bonuses with a value total more than $600 during the calendar year.
- Pure Romance will not withhold taxes of any kind, including income taxes, FICA, FUTA, or other statutory withholding or employment taxes applicable to employees. As required by law, the Company will report to the Internal Revenue Service all payments made to you. You will comply with all tax laws applicable to employees or self-employed individual.
For more information on your 1099, refer to the Incentive Requirements Guide.