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IPFS News Link • TAXES: Federal

Costly IRS Mandate Slipped into Health Bill

• Blacklistednews.com/
 
The changes will force millions of businesses to issue hundreds of millions, perhaps billions, of additional IRS Form 1099s every year. It appears to be a costly, anti-business nightmare. Under current law, businesses are required to issue 1099s in a limited set of situations, such as when paying outside consultants. The health care bill includes a vast expansion in this information reporting requirement in an attempt to raise revenue for an increasingly rapacious Congress. In a recent summary, tax information firm RIA notes the types of transactions covered by the new 1099 rules: The 2010 Health Care Act adds “amounts in consideration for property” (Code Sec. 6041(a) as amended by 2010 Health Care Act §9006(b)(1)) and “gross proceeds” (Code Sec. 6041(a) as amended by 2010 Health Care Act §9006(b)(2)) to the pre-2010 Health Care Act categories of payments for which an information return to IRS will be required if the $600 aggregate payment threshold is met in a tax year for any one payee. Thus, Congress says that for payments made after 2011, the term “payments” includes gross proceeds paid in consideration for property or services. Basically, businesses will have to issue 1099s whenever they do more than $600 of business with another entity in a year. For the $14 trillion U.S. economy, that’s a hell of a lot of 1099s. When a business buys a $1,000 used car, it will have to gather information on the seller and mail 1099s to the seller and the IRS. When a small shop owner pays her rent, she will have to send a 1099 to the landlord and IRS. Recipients of the vast flood of these forms will have to match them with existing accounting records. There will be huge numbers of errors and mismatches, which will probably generate many costly battles with the IRS.

2 Comments in Response to

Comment by Ross Wolf
Entered on:

Reading this new IRS Code it would appear apparent that customers of hookers must file 1099’s for the services paid for when they paid $600.00 or more. However some hookers charge for a “half and half” so perhaps they can charge $300 for each half. Because the amount qualifying to file a 1099 on reported spending is so low “$600” it should be consider the Obama government might intend to use the 1099 information to invade the lives of private Citizens.

Historically Socialists like Obama after getting into government, thrive like cancer—targeting healthy economic markets and individuals with new and higher taxes and regulations to pay for their public programs, to make Citizens dependent on government. The proliferation of Socialists in the U.S. Congress, like REDS in other governments, will see their welfare programs collapse after they run out of Taxpayers’ money. Unfortunately America will also collapse. Obama is moving fast toward keeping his word when he stated he wanted to “level the playing field” for the people; apparently Obama meant destroying Free Enterprise, forcing on businesses unfathomable costs of forced health insurance, new and higher taxes and regulations that will inhibit investment and hiring new employees for decades. Obama like other Marxists, apparently believe bankrupting the middle class with taxes will transfer wealth to the workers. But historically socialists have always failed—workers can’t work for bankrupt employers.

Comment by foundZero
Entered on:

This one I like. 1099s for McDonalds, for the baby sitter, for the nice old lady that watches your plants. We'll all have to carry around stacks of 1099 forms. Pretty soon there will be a Facebook button called "1099 Me!".

Pretty soon we'll need a form to get out of bed. You paid taxes on your bed as an OBJECT but you haven't yet paid USAGE TAXES on your bed. Oh yeah and I hope you remember to 1099 the bed manufacturer when you replace it.



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