How to define a supplier who provides both income taxable and non-income taxable services

Does anyone know how to solve this issue for 12.1.3?

 

A supplier provides both 1099 and non-1099 services.  In our business case the 1099 services are manually entered in AP as an invoice, and the non-1099 services all come through as expenses in IExpense.

 

·         Option 1:  Manually adjust invoices.  This is the current solution used.  We have just one supplier and just manually adjust those non-1099 invoices (remove the income tax type from the distribution) before printing 1099’s.  (This is done both manually and where appropriate using the Update Tax Details Utility).

·         Option2:  Create 2 suppliers.  One as taxable and the other as non-taxable.  This would appear to cause some confusion for the users.  Not sure if this is a good option or commonly done.