There are a number of "affiliate" plans on the net, where somebody gets a cut for selling stuff (by using an affiliate link). The companies that offer them send 1099s for the money sent. Most people who have such accounts use them for their own purchases as well as providing them to others, so the money received is partly from their own purchases (which should be considered a discount, right?) and partly from sales to others (taxable income).
(Comparable situations: (1) I buy widgets for $20 each, sell them for $25. I keep a bunch of widgets for myself; my taxable income is $5 per widget I sell (say, 50, total $250), and the widgets I bought for myself at $20 (another 50) aren't counted. (2) I have an affiliate link for widget-buyers that gets me $5/widget. Other people buy 50 widgets through that link, and I buy 50. I get a 1099 for $500.)
I would assume that the part of the payment for purchases made by the taxpayer isn't taxable; how is this shown on the 1040? In some cases, the purpose of the affiliate signup is entirely to get his own purchases cheaper, so there's no business involved, and no Schedule C.
Seth