Congress plays chicken over paying for 1099 mandate repeal

BTW, GD, I do not expect you to change your opinion, nor to be swayed either way by this debate. Any opinion on the matter is exactly that at this point...an opinion. You are basing your opinion on the current and previous implementations of a majority of 1099-MISC filings that have occurred business-business. I am basing them on the clear text of the additions, as well as the indicated intent thereof, as indicated through accounting/tax professionals and industry experts.

We are on two sides of the issue, and will most likely remain on such until the law is repealed or the IRS reveals its new forms and regulations in the next several months. In either case, I hope that the discussion/debate is able to make certain issues about the law known and perhaps prepare individuals in their ultimate course of action when the time comes to do so.

 

Log in or Sign up to hide this ad.

Vague references to the tax code is not a defense for what you stated which was that individuals don't need to be concerned about the 1099 mandate. This is incorrect and it was explained above in clear terms. If you provide any service or good to a business that is $600+, then the new law requires them to issue a 1099 to the vendor they paid for the good or service. It does not matter if this vendor was a private individual, a small business or a corporation. This includes the sale of $600+ coins. You can't get out of by simply stating I did this as a private individual.

 

Actually, it is defined in latter sections, specifically 26 USC § 7701:

Thus, any deviation from this definition must be express or obvious in its incompatibility with the intent of the law. Section 6041 is referenced to five other times within the Internal Revenue Code (title 26), and once outside that particular Title (sections 3406, 3509, 6045, 6051, and 6724 of Title 26 and section 2719 of Title 25).

There are nine sections in the Code of Federal Regulations dealing with 26 USC 6041 (26 CFR 6041.1-9). Nowhere in the regulations is there reference to any exemption to the definition of "person" being an individual.

If you can reference the code or regulation that defines the payee expressly as a business and exempts an individual from the definition of "person", your argument would hold more clout. But, like I said before, there is still time to wait for finalization on this subject.

Something to think about is from the IRS itself:

Why would there be a "privacy" issue with a business entity? A business entity can easily apply for an EIN instead of using their SSN if they are a sole-proprietor or contractor without employees. In my opinion, this concern would only be valid with actual "private" individuals.

 

http://www.irs.gov/newsroom/article/0,,id=225029,00.html

A bit dated but contains some interesting language.