Bend Over Because You've Just Been Fucked!

[NippleMuncher]

Because it wouldn't have passed on it's own merits, there was legislation buried in the health care reform bill that will drastically affect everyone who lives in this country. If you had concerns about money, privacy, or identity theft before, you'll never sleep again after reading this.


===

"Health care law's massive, hidden tax change"

Section 9006 of the health care bill -- just a few lines buried in the 2,409-page document -- mandates that beginning in 2012 all companies will have to issue 1099 tax forms not just to contract workers but to any individual or corporation from which they buy more than $600 in goods or services in a tax year.

... But under the new rules, if a freelance designer buys a new iMac from the Apple Store, they'll have to send Apple a 1099. A laundromat that buys soap each week from a local distributor will have to send the supplier a 1099 at the end of the year tallying up their purchases.

... The notion of mailing a tax form to Costco (we're registered as a business) or Staples each year to document purchases may seem absurd to small business owners, but that's not the worst of it, tax experts say.

Marianne Couch, a principal with the Cokala Tax Group in Michigan and former chair of a citizen advisory group to the IRS on small business and self-employed tax issues, thinks the bigger headache will be data collection: gathering names and taxpayer identification numbers for every payee and vendor that you do business with.
http://money.cnn.com/2010/05/05/smallbusiness/1099_health_care_tax_change/

===
"Costly changes to 1099 reporting in health care law"

“There is no doubt this will be an administrative nightmare for many businesses in the first year or two,” Jamie Downey, partner at Downey & Co. said in The Boston Globe. “Have a large business-related meal at a restaurant, this will need to be reported on a 1099. Spend a week in a hotel in Waco, Texas; you will need to send a 1099.”

... This 1099 reporting mandate has the distinction of being the first provision of the health care bill to be challenged in Congress. U.S. Rep. Daniel Lungren (R-CA) introduced legislation on April 26 to repeal this business reporting provision of the new health reform law, according to The Hill's "On the Money”blog on finance and the economy.

... According to Lungren, the IRS is awaiting instruction from the U.S. Department of Health and Human Services on how to enforce the reporting requirement, according to The Hill's "On the Money."

... "[The IRS] told us that HHS is the one that is given the requirement to interpret this entire law," Lungren said. "That was an extraordinary response as far as I was concerned...I have never known HHS in the past to be responsible for interpreting tax law."

http://www.accountingweb.com/topic/tax/costly-changes-1099-reporting-health-care-bill
===

Costly IRS Mandate Slipped into Health Bill

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.

http://www.cato-at-liberty.org/2010/04/26/costly-irs-mandate-slipped-into-health-bill/

 

[NippleMuncher]

Interesting ...

 

[SweetErika]

It'll likely be repealed though, no?

In your readings, did you see which Congresscritter put it into the health care bill?

 

[NippleMuncher]

No, I do not know who is responsible for it. The thing that amazes me most is that this kind of crap is perpetrated on the populace, yet nothing happens to the architects of the collapse our economy, as a matter of fact, they're rewarded with many more billions of dollars for their evil doing.

One can only hope that it is repealed before it takes effect.

 

[TypicalDeviant]

Even if it's not repealed before it takes effect, it is unlikely to be enforced. Despite criticism to the contrary, the IRS (who would enforce this) is pretty pragmatic when it comes to enforcing the IRC.

If it costs them $500 to enforce a single instance of something only to see $300 recouped, they generally won't do it.

 

[midwestyankee]

Not to put too fine a point on things, but don't you usually have to bend over first before the fucking can commence?

This does seem like a grossly impractical solution to an otherwise troubling problem. And it makes sense that a congress critter is already working on having this dud of a rule lifted from the IRC.

In other words, sometimes legislation contains errors. And then Congress can fix the errors.

Seems like a normal course of events to me.

 

[infinity706]

Well, hopefully, they'll at least fix it in a less stupid way than when a legislator got sex toys banned in Texas. The solution was to slap "novelty" on all sex toys that would be sold in Texas and not include instructions for use, rather than actually pass a bill to remove the clause. Yes, that's why your vibrator says "sold only as a novelty."

Bottled water also has an expiration date due to stupid shit like that.

 

[TypicalDeviant]

That's crap, infinity, you know that old bottles of water can get positively rotten!

 

[infinity706]

I've drunk bottles of water that were serveral years old and nothing happened to me. Its a sealed container.

 

[midwestyankee]

I've drunk bottles of water that were serveral years old and nothing happened to me. Its a sealed container.

Small amounts of air can, in fact, pass into that sealed container. And said air could quite easily contain bacteria of a type that could cause you problems. You've apparently been lucky.

 

[Experiencedguy]

Look, it's only 2010. If this bill doesn't go into effect until 2012, that give you three years to worry about it (2012 expenditures reported on taxes due in 2013). Odds are very strong something will change in three years.

My view: As a small business owner myself, if it does go into effect, I'll just ignore it. If the IRS comes after me, I'll just plead ignorance. Worse case: A small fine. Best (most likely) case: If I don't submit anything, they won't do anything. Typically, after sucessfully passing your first two or three audits, the IRS will leave you alone, unless something abnormal comes up. (If you've owned yor own business more than ten years, you should know that.)

 

[NippleMuncher]

Look, it's only 2010. If this bill doesn't go into effect until 2012, that give you three years to worry about it (2012 expenditures reported on taxes due in 2013). Odds are very strong something will change in three years.

My view: As a small business owner myself, if it does go into effect, I'll just ignore it. If the IRS comes after me, I'll just plead ignorance. Worse case: A small fine. Best (most likely) case: If I don't submit anything, they won't do anything. Typically, after sucessfully passing your first two or three audits, the IRS will leave you alone, unless something abnormal comes up. (If you've owned yor own business more than ten years, you should know that.)

One item I read is that it starts going into effect in 2011 (don't ask for a quote, I don't remember where ). And, it isn't limited to business to business, it is any store selling you any amount of product or service in excess of $600. Likewise for the individual, if you sell a used car, or piece of equipment, or personal items you too must file a 1099 on whomever purchased your items. The amazing thing here is that didn't you already pay tax on the money you earned to pay for that item originally? You probably even paid a sales tax on the damn thing. Now you're selling said thing, likely at a greatly depreciated value, which means that you've lost money by owning said item, and now you have to pay more taxes on what's left of that "investment"?

I seriously doubt that claiming ignorance with the IRS is going to get you anywhere. As a business, you should have receipts for everything you buy and sell, which means that you should be collecting all the personal DNA of the individuals you've done business with. Not only will the IRS rape you for not following the rules, they'll scour your books and likely fine you for every instance of non-reporting.

 

[TypicalDeviant]

Genuine ignorance will, in fact, get you places with the IRS. They're not out to fuck you, they're out to make sure you render unto Caesar.

Before you freak out too much about this, remember that it has to be worth it for the IRS to investigate something. They're not going to go after you if doing so costs more than the potential gain.

Second, if you sell something to someone as a private individual, a car, for example, you're supposed to report the gain (if any) and pay taxes on it. That's not new in the least. Requiring the filing of a 1099 just means that the IRS would receive evidence of the transaction when it occurs and would cross-reference it with your return when you file. Just like they do with your W2s, 1099s, and other tax forms.

Is this a little ridiculous? Sure, it costs time and money to fill out the forms and file them and then more time and money for the IRS to check them for what is probably not that much earned. Will it stand? Probably not. Will it be enforced? I'm 90% certain it won't.

 

[Experiencedguy]

Hey, look guys!! I've owned my business for over 35 years, and been audited three times. All passed with flying colors.

The point is: The IRS doesn't have enough manpower to do anything about this. So who will they target? The multibillion dollar corporations. The odds of them even investigating someone under $1,000,000 to insure enforcement is just about zero.

Why don't one of you guys send an E-mail to the IRS (using your own real name), and ask them how they intend to insure compliance with the law. Then, post your results here for us all to read.

My feelings are: If you have an opposing viewpoint from mine, that is fine, I can respect that. But if you tell me I am inviting an audit, what does that make me think of you. Also, I keep great records (with a BS in Accounting, and a masters in business, I damn sure better, because for that there is no excuse). I know what I'm doing with the IRS, and probably have a lot more experience with them than you do (unless you are make a living representing people to the IRS).

 

[Cathleen]

I'm just posting because Erika's word "Congresscritter," how appropriate girl. May I have the Boston rights to it, please?


As for the bill, IIRC the title of the bill doesn't even have "health care" included. In the words of Bob Seger "C'est la vie say the old folks, it goes to show you never can tell."

 

[SweetErika]

I'm just posting because Erika's word "Congresscritter," how appropriate girl. May I have the Boston rights to it, please?

I think I'm borrowing it from the ever clever Yank, so you might have to ask him.

 

[bambikiller]

You wanted change,
You voted for them and got them elected, well now you got it.
Quit your bitching.
Of course your president, senitor and congressman are not to blame they never read the bill they just voted for it.

 

[midwestyankee]

I'm just posting because Erika's word "Congresscritter," how appropriate girl. May I have the Boston rights to it, please?


As for the bill, IIRC the title of the bill doesn't even have "health care" included. In the words of Bob Seger "C'est la vie say the old folks, it goes to show you never can tell."

I think I'm borrowing it from the ever clever Yank, so you might have to ask him.

Permission will be warmly provided upon receipt of two first-base side box seat tickets at the next Yankees vs. BoSox series at Fenway. Best results will be obtained by shipping said tickets nestled next to a carton of four three-pound live Maine lobsters and a case of Portland's finest Shipyard Chamberlain Ale.

 

[SweetErika]

Permission will be warmly provided upon receipt of two first-base side box seat tickets at the next Yankees vs. BoSox series at Fenway. Best results will be obtained by shipping said tickets nestled next to a carton of four three-pound live Maine lobsters and a case of Portland's finest Shipyard Chamberlain Ale.

Great. Now shall we talk about my referral fee?