One person gets the payments, the other person gets the 1099. This happens when an agency goes to make a payment, they look the payee up in the vendor file. The person is there but the address and city are wrong. Instead of verifying if this is the correct individual, and the correct ID number, they add another suffix so the payment goes to the correct person at the correct address. At the end of the year all payments revert to the '00' suffix and the other person ends up with a 1099 for income he knows nothing about.
Some companies have one address for payments and another address for all other correspondence.
Make sure to set the 'all other correspondence' address up as the '00' suffix and the 'payments' address up as the '01' suffix. This will allow both the 1099 and payments to go to the proper addresses. Other agencies may be making payments to this vendor and may not be aware of the number change. When we shut down a number because a new number is being used a note will be put in the vendor file referencing the new number so other agencies will be able to update their information. When you initially ask them for their ID numbers make sure they are aware this is for tax reporting purposes.