What determines if a vendor will receive a 1099 is the Fed ID entered on the Tax Info tab of the vendor.  

To activate this field:

Open Tax Systems Form

Tax ID Prompt Location = Both

Labels Tab:

Tax ID Label = Fed ID

On Vendors form under Taxes tab, enter the SS# of vendor to receive 1099.   DO NOT enter a Tax ID for any corporate vendor who is not to receive a 1099.  If you wish to keep their Corp ID on file, add this as a User Defined field.