No expert here but I have an accounting degree that I don't use and I've taken tax classes....

If you won in 2009 you report it when you file your taxes for 2009.  I believe that companies are only required to issue 1099s for wins over $600 but they may also do it for smaller wins also.  You are supposed to report all wins although the IRS only knows about the ones they get the 1099s for.

I'm sure others will have better info on this.

Thank you so much!

That's incorrect.  If you go to the IRS' site, they state that prizes are taxable at fair market value.  There are no stipulations stating that only certain prizes are taxable and others aren't.  There is no room for interpretation other than everything considered a prize is taxable.

They require that companies report any prize over $600.  However, a company most certainly can report any prize under $600 at their own discretion.  I've had a number of prizes, as low as $85.00, reported to the IRS.

Any prize that the sponsor does not report to the IRS is the responsibility of the prize winner to report on their own.

Then she apparently doesn't know how to handle the reporting of sweepstakes prizes.  Keep in mind, that most CPA's (hopefully, that's what you used) have no experience handling the reporting of sweepstakes prizes.

Just like our CPA, we gave her all the documentation on the prizes we won and asked her to check the information out with the IRS also which she did and verified.

It sounds to me that your CPA may have been going by the guidelines of reporting lottery, casino, etc., winnings which have totally different reporting guidelines than sweepstakes winnings.

Also, keep in mind, that even if you didn't get a 1099 on any prize, even possibly a smaller one, it doesn't mean that the sponsor didn't report it to the IRS.

Some sponsors will make out a 1099 after an individual has accumulated $600.00+ in prizes from them.  For example, if you have won three times from a sponsor and each prize was worth $200.00, they may then send in a 1099 for $600.00.

Here's one section from the IRS that defines reporting prizes (Page 4, Box 3, Other Income):

http://www.irs.gov/pub/irs-pdf/i1099msc.pdf

It's pretty straight up--report the required reported income of $600.00 or more on 1099's, and report other prizes and awards.  You'll notice that they don't define prizes as those that are reportable and those that aren't.  It's straight up "also enter in Box 3 prizes and awards...".  There are three exceptions, but you'll see none cover winning and accepting a prize.