I did very little mystery shopping this year, but one shop I performed was a reimbursement-only shop for a large ticket item (over $1000). I was surprised when I opened the mailbox to find a 1099 from this MSC. My understanding is that such a payment is not taxable, as it was reimbursement only up to a certain amount, and not paid a flat fee. I realize that nobody here is a lawyer, but is my understanding correct? If so, what should I do here?