When we bought our park had a lady who did all our very light maintenance in the park and for that she was given free lot rent. My wife felt that was wrong and requested they complete a 1099 form for the IRS which alerts the IRS that we paid an independent contractor over $600 per year for services. My wife has her own bookkeeping/payroll company. The IRS matches that up against their tax returns to ensure accuracy. In this case we were 'in a sense' paying her $225 x 12 per year or or $2575 per year.
They balked at it and said they didn't want to provide so we turned to someone else to do it. Sad thing about it is that they did not want to report the free pad rental as income; but now they pay us after tax dollars for the rent. Seemed like six of one; half dozen of another to me... oh well.
It should go without saying... I am not a tax person and can't commit 100% this is accurate. It is just what we do. My wife will not allow me to pay anyone more than $600 per year without them completing that form. It is very simple...and pretty much made for situations like this.