Thanks, very thorough & I think I understand. If you don't mind one follow up. So the added together total of 1099's for this entity (in this case merchant reporting sales income by way of credit card sales) is going to be overstating the sales income by about 100k. You are saying the IRS will not care that the tax return is (correctly) reporting 100k LESS in sales. They will not issue a letter asking anything about the discrepancy between 1099 sales income on 1099s and 1120-s line 1a (gross receipts or sales).

Is that correct what you are saying?

Thank you. 

I know for sure if a w-2 is left off, the TP hears about it. Apples & oranges, but still.

🙂