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Title: Costly IRS Mandate Slipped into Health Bill
Source:
[None]
URL Source: http://www.cato-at-liberty.org/2010 ... date-slipped-into-health-bill/
Published: Apr 28, 2010
Author: by Chris Edwards
Post Date: 2010-04-28 12:02:05 by DeaconBenjamin
Keywords: None
Views: 228
Comments: 15
Most people know about the individual mandate in the new health care bill, but the bill contained another mandate that could be far more costly. A few wording changes to the tax code’s section 6041 regarding 1099 reporting were slipped into the 2000-page health legislation. 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. Tax CPA Chris Hesse of LeMaster Daniels tells me: Under the health legislation, the IRS could be receiving billions of more documents. Under current law, businesses send Forms 1099 for payments of rent, interest, dividends, and non-employee services when such payments are to entities other than corporations. Under the new law, businesses will be required to send a 1099 to other businesses for virtually all purchases. And for the first time, 1099s are to be sent to corporations. This is a huge new imposition on American business, costing the private economy much more than any additional tax that the IRS might collect as a result. There appears to have been little discussion before this damaging mandate was slipped into the health bill and rammed through Congress, but a few business groups did raise concerns. Here’s what the Air Conditioner Contractors of America said: The House bill would extend the Form 1099 filing requirement to ALL vendors (including corporate) to which they pay more than $600 annually for services or property. Consider all the payments a small business makes in the course of business, paying for things such as computers, software, office supplies, and fuel to services, including janitorial services, coffee services, and package delivery services. In order to file all these 1099s, you’ll need to collect the necessary information from all your service providers. In order to comply with the law, you would have to get a Taxpayer Information Number or TIN from the business. If the vendor does not supply you with a TIN, you are obligated to withhold on your payments. Private transactions are the core of a market economy, and the source of America’s growth and prosperity. Now the federal government is imposing a vast new web of red tape on perhaps billions of these growth-generating private exchanges. For what purpose? So the spendthrift Congress can shake a few extra bucks out of private industry? The business sector is the generator of America’s high living standards, but most federal legislators just see it as a kitty to be raided or a cow to be milked dry. I’m stunned that there wasn’t a broader debate before such a costly mandate was enacted. If it goes into effect, it will waste vast quantities of human effort in filling out forms, reworking computer systems, collecting and organizing data, and fighting the IRS. The struggling American economy can’t afford anymore suffocating tax regulations. This mandate is a giant deadweight loss. It should be repealed.
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#1. To: DeaconBenjamin (#0)
Those effers are completely insane.
ping
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It's about money. It's ALWAYS about money. The more receipts they can scrutinize, the more money they can confiscate. Expect a lot of companies to balk at doing it.
It is better to be hated for what you are, than loved for what you are not. - Tommy The Mad Artist.
Cato is a suspect org in my opinion.
"Satan / Cheney in "08" deleted
The relationship between morality and liberty is a directly proportional one. "You've got to put right and wrong above legal and illegal. Because when tyranny becomes law, rebellion becomes duty; and it is not rebellion at all, it is submission to the higher law that our government is in rebellion to. We're not the rebels, they're the rebels."
deleted
The relationship between morality and liberty is a directly proportional one. "You've got to put right and wrong above legal and illegal. Because when tyranny becomes law, rebellion becomes duty; and it is not rebellion at all, it is submission to the higher law that our government is in rebellion to. We're not the rebels, they're the rebels."
deleted
The relationship between morality and liberty is a directly proportional one. "You've got to put right and wrong above legal and illegal. Because when tyranny becomes law, rebellion becomes duty; and it is not rebellion at all, it is submission to the higher law that our government is in rebellion to. We're not the rebels, they're the rebels."
deleted
The relationship between morality and liberty is a directly proportional one. "You've got to put right and wrong above legal and illegal. Because when tyranny becomes law, rebellion becomes duty; and it is not rebellion at all, it is submission to the higher law that our government is in rebellion to. We're not the rebels, they're the rebels."
Tommy nails it once again. We need award you a Doctorate of Reality.
"Satan / Cheney in "08" OK - Postage - do I send a 1099 to USPS for my postage? Austin Energy - a 1099 for renter's utility bills? National Tenants Network - a 1099 for credit checks? Are you shitting me? And that's just a minuscule part of the checks that I write every year. And do all these recipients then have to file them on their returns? Many of them don't even have to file returns. Lord above.
You think they are lying about this being in the bill? Or you think that the US is better off having this provision enacted?
he who wants bread is the servant of the man that will feed him, if a man thus feeds a whole people, they are under his control.
Do I look like your CPA?
he who wants bread is the servant of the man that will feed him, if a man thus feeds a whole people, they are under his control.
Greedy Fuckin' Pigs.
deleted
The relationship between morality and liberty is a directly proportional one. "You've got to put right and wrong above legal and illegal. Because when tyranny becomes law, rebellion becomes duty; and it is not rebellion at all, it is submission to the higher law that our government is in rebellion to. We're not the rebels, they're the rebels."
Yes, they are insane. Now I wonder what would happen if, oh just speculating a hypothetical here, a bunch of good thinking honest people started sending in tons of 1099's for fake transactions, listing fake addresses and names for both payer and payee (or the names of politicians) and helped flood the system even more? Just thinking out loud here. I would never, ever advocate such a thing. That would be wrong.
MapQuest really needs to start their directions on #5. Pretty sure I know how to get out of my neighborhood.
#2. To: DeaconBenjamin, *libertarians* (#0)
#3. To: DeaconBenjamin (#0)
#4. To: DeaconBenjamin (#0)
#5. To: DeaconBenjamin (#0)
#6. To: Lod (#1)
#7. To: Lod (#1)
#8. To: DeaconBenjamin (#0)
#9. To: TommyTheMadArtist (#3)
It's about money. It's ALWAYS about money. The more receipts they can scrutinize, the more money they can confiscate.
#10. To: Eric Stratton, Deac, 4 (#6)
#11. To: tom007 (#4)
Cato is a suspect org in my opinion.
#12. To: Lod (#10)
#13. To: Eric Stratton, all (#6)
Fucking pigs!
#14. To: sizzlerguy (#13)
#15. To: DeaconBenjamin (#0)
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