Repeal voted on and Passed.

I know nothing of tax exemption numbers. My business does not have one. Everything we buy is consumable.
All 1099s we have ever exchanged in the past have been paper. So even if my business spent the dough to go electronic, I still get paper 1099s... and that is assuming it is 'okay' that the govt pile on more things to buy that were totally unnecessary until they went overboard with 'unfunded mandates' to private business. Yeah, anything is possible, however that does not negate the idea that something is just plain over-done and arguably unreasonable.

 

Log in or Sign up to hide this ad.

You don't seem to know how this works. Teachers/educators don't apply for tax id numbers to avoid sales tax on work related expenses. This is handled on the individual's income tax forms as a deductible item. A sales tax number is used by a business to avoid paying sales tax on items they are purchasing for resale, because they will be collecting the sales tax from their customers. It required to keep multiple sales taxes from being applied each time an item moves between suppliers. Furthermore, this is a rather straightforward transaction that only involves state sales tax.

You are taking this this particular situation and making the mistake of assuming that because the sales tax number is simple, then the 1099 law would be simple as well. This would be a logical fallacy. This new law is a nightmare of reporting both for the vendor and the individual that will get sucked into it, because it might possibly mean they have to itemize their taxes instead of filing a short form. This even if they lose money on the coin sale. The issue isn't in the mechanics of how its reported or filed, its an issue of horrendous record keeping, which, for the most part, you have to keep a paper record of said transaction. I will also point out that regardless of whether its electronically filed or not, each 1099 filed by a small business costs them money in accounting fees.

 

The thing is we were not arguing "the idea that something is just plain over-done and arguably unreasonable." Your unsupported comment, "You can't digitize a 1099, trust me, we would if we could." had no basis to overturn the prior suggestion that a simplified digital system could be implemented to ease the process.

Those bemoaning the ideas of piles of paperwork could save themselves the free space in their "imaginations" worrying over truck loads of paper headaches and waste. They are just seeking negative and extreme examples of what may never come to be to find faults for the potential coming 1099 reporting rule.

As I said, new systems to handle new forms of reporting will come on line. My layman's example, Turbo Tax replaces even having to seek, let alone know what an actual income tax reporting form looks like to get the job done. No trips to the post office for forms or stamps to mail off your payment.

I'm not saying each individual business owner has to pony up and become a spread sheet programmer to write software they need to track transactions. I'm suggesting that there are tools that will be developed if a need arises. App developers are one such plausible group that might tackle this.

People tend to make comments without support/reasoning for such utterances, not so much as to discuss the point at hand, but to continue finding reasons to twist the topic back to a form of complaint regarding their feelings against the proposed 1099 rule coming into effect.

 

Well put.
I can't get past the enormity of the requirement myself.

 

I see your point, but the idea of cheering on the overturning of the requirement is that it is duplicitous, overkill, and totally unecessary is where I was coming from, and I assume the OP.
To roll over and say "someone will make an app" is just not what everyone choses to do when unfunded mandates overreach.

 

Thank you for your detailed clarification. Yes, I was trying to find a simple type of transaction as an example (perhaps a poor one) to illustrate that there may become a need to streamline such new required reporting. So I suggested that a automated digitized transaction tracking system might be developed to fill this need rather than the old/current paper system, thus simplifying the pending headache people anticipate and use to argue against the potential new reporting. Many use these reasons as their sole basis for arguing against the potential new requirement of reporting. I'd like to hear better reasons why they are against it rather than bemoaning the effort of bookkeeping, which is their business responsibility irregardless of this potential new requirement.

 

I'm not rolling over and accepting it at all. Rather, I'm trying to get better reasons from those people who cite tedious paperwork and record keeping as their sole argument against this potential new reporting requirement.

 

Record keeping is a responsibility of business. Most small businesses, especially those with a few employees, have to have accountants do the record keeping because of the endless rules and regulations that now exist having to do with taxes and reporting. The 1099 requirement will increase this burden substantially because each 1099 that is written will have to be produced by an accountant, filed with the government and resolved on the tax forms. For a business following the law, it will increase their costs substantially because accountants are going to charge more for this.

Furthermore if an individual sells a $600+ coin to a coin shop, they will be issued a 1099 and this can only be resolved on one's taxes with the long form. Else, the IRS will assume the entire sale is taxable income.

This is an overreach by the government.

 

Why does there need to be a "better" reason?
It's more than tedious. The expense to business and national productivity is going to be huge.
What we have is already a huge drag on our lives. We should be pushing ideas like flat taxes and such to tear down the overburdened system we have now, not adding to it.
Therefore, my reasons as a business owner, taxpayer, and citizen are plenty good enough to cheer on attempts to limit regulations such as these.
Keep business, workers, and consumers safe... tax people fairly, quickly (not much accounting), and as little as possible.
That is my idea of good government. (I am dropping this now to avoid politics)

 

"Why does there need to be a "better" reason?"

I appreciate hearing what you guys have to say about it. I don't get as much when others only complain about doing paperwork.

I think you just gave a very complete reason in your post, the sort of thing I look for when others make their comments.

I still maintain, that if a system for automatically tracking such transactions is devised, especially for businesses doing numerous transactions, it will not be as burdensome as some fear. And I don't see how this adds so much additional cost to business owners and may eliminate a hired accountant to manually track these transactions in addition to other services they charge you for.

 

The law as written does not provide any funding nor compels the IRS to create an automated 1099 system. I would guess that it would be horrendously complicated if not impossible to implement. Furthermore unless congress changes a number of other laws, it would not relieve the business of having to keep their own records anyway. The primary purpose of record keeping, from the businesses perspective, is to be able to prove you complied with the law. Ultimately if you end up in court you will need your own set of records to cover your case.

 

Krispy, I think you are waaaayyyy underestimating how difficult this will be. In addition to collecting all of the required information at the point of every transaction, entering it into a system, entering it into the system in exactly the same format down to every letter and space to avoid duplication or understating annual totals [which will no doubt result in a fine], being able to do this accurately from multiple locations, getting people to provide accurate information, merging tax and normal accounting systems, which few businesses currently do, and making everything reconcile so that it can withstand audit, printing, postage, paying the accountant $100+ per hour to do this.... This is a total nightmare for everyone except perhaps the extremely large or extremely small business.

Edit: A couple of other thoughts... Many companies use multiple systems at different locations or subsidiaries due to legacy issues in the company. Anyone who has attempted to merge systems will understand how difficult this will be. And you will need to find time to respond to a few dozen, or hundred, or thousand calls from people claiming the amount on their 1099 is wrong and demanding a corrected copy. This will all have to be researched and verified. There is a tendency to downplay how much work things can be because they are "automated."

 

Those are great points.
We buy service parts for a small fleet of vehicles at one auto parts chain. We try to keep purchases at one location of this national chain because each location, while using a very high tech system that can communicate among themselves on a 'surface' level of info, they cannot access each location's accounts and fine details. So, we have multiple accounts with this one company that do not interchange. We have accounts at different locations that by necessity we have shopped at in the past, as well as the one locale we try hard to keep as our only provider for this one company. THEN, due to employee error, we have THREE accounts at the one location.
Due to ever changing employees on their end, and admittedly more than one of our employees running errands to the store, the account has been duplicated. (3 times in almost 10 years isn't too bad)
Even before the 600 rule, accounting has been adversely affected on just this one sample account for one small business.
Think of all the other accounts we have, and everyone else has, and room for data input error, mutiplied by all the larger companies throughout the nation, and this is just a 'monkey making it with a football' situation, so to speak.

 

Good news to everyone,

Now to get it through the senate and signed. Cripes, I could live with the limit being raised to $5K or even $10K. This is just repealing it.

What this is all about for those that might not have heard is that there was a provision in the health care law to require staring in 2012 all sales of merchandise of more than $600 to be recorded on a 1099 with the buyers name and numbers and submitted to the IRS. This would be to establish a cost basis for when you want to sell that item. Now this of course had the coin market upset because it would apply to a lot of their transactions. However, it would apply to YOU if you bought a stove or tv for over $600. That new flat screen and you'd have a 1099 submitted in your name.

Folks have not been happy about the paperwork and they have not been happy about the invasion of privacy.

peace,

rono

 

Cloud / Ratio / Fatima: Thank you all for the providing further details regarding reporting as well as more specific reasons in opposition to this reporting idea. I wasn't trying to underplay the effect it could have but rather to get to the root of peoples opposition beyond labor involved filling in forms as a matter of business. Should something like this go forward, it seems a business opportunity to create a system for tracking and quickly inputting an individuals information to speed the process and free it of errors. Again, thank you for the points you've raised.

 

Hi all,

Nice discussion and my apologies for responding before reading the entire thread.

You make some valid points krispy and no doubt most businesses and many individuals would figure out a way to automate the process quickly. The problem that I see is the cost/benefit ratio of having a reporting threshold at $600. The potential capital gains taxes on transactions of between $600 to say $5000 needs to exceed the costs of reporting and record keeping. Lowes isn't going to have a problem but the transactions between individuals are going to create reporting requirements and that is not cost free. My thoughts all along was that they should just raise the threshold to $5000 or even $10000 and while I'd still consider it to be too much Big Brother, at least the numbers would work.

Hey, we used to have our meal expenses paid at so much per meal and you didn't need a receipt. If you were out overnight, a whole days worth of meals was $31. If I chose to starve, I would still get $31. Ah, but then they decided that too many people were eating all that $31 so they switched to requiring receipts. My people were in travel status all week, every week. They now had to keep receipts from 12-15 meals, make every meal a separate entry on their travel expense record and then their supervisor had to audit and sign it and then finance had to audit and pay it. Now was the cost of paper work outweighed by the savings?

peace,

rono

 

I have a business with multiple locations where each location buys inventory from 100 or more different individuals each and every day. Each individual transaction seldom exceeds the $600.00 1099 reporting threshold. But in the aggregate I don't know how much inventory I'll purchase from a specific individual throughout the entire year. Therefore I will have to treat every individual I purchase inventory from as a potential recipient of a 1099 by collecting, verifying and documenting all their taxpayer information. On each additional transaction with that same individual throughout the year - I'll have to re-verify and document any changes (mailing address, etc) to their taxpayer information. Then I'll have to consolidate the information from all locations into a single database being that I may buy inventory from the same individual at multiple locations. Then I'll have to verify the taxpayer information from each location and determine which location's information is the most current. I don't know how many 1099s I'll have to produce at year's end but I'll have to track purchases from thousands of people each and every year. I know my business is not a typical model but the proposed 1099 rules will prove to be very costly for me. Not only due to the direct cost associated with compliance - many of my customers will opt to do business with those who accept the risk not to comply with the new regulation.

 

I'm not surprised these idiots would come up with the most complicated, crushing, insane way to hurt business, and then tack it on to a "healthcare" bill to get it rammed through. Then have the audacity to call it a 'good idea.' lol

This may seem like stating the obvious, but technically, you could own 3,4, maybe 5 different locations. One individual could sell a single silver quarter to the various locations, 122 times throughout a year. He might not need to be worried about after 121. Then all of a sudden when he sells 122, it all has to be compiled between the stores and a 1099 sent out. Maybe he only intends to sell 120 that year? But you better keep track of them all just in case! There's nothing stopping them from turning around and doing it next year! Stores would have to set up minimum purchase limits to make it even somewhat feasible which might drive away some customers.

Just when you think it couldn't get any more asinine. Glad to see this one go down. Anybody that would vote for somebody that voted against this repeal should have their head examined.

 

Since this isn't the political forum section I won't venture into replying to the liberals defending their big government.

 

Vess makes a point that I had forgotten and that's the annual cummulative issue. But I'm SURE there's an app for it. Yeah, right.

feh, too much big gov't is too much big gov't.

rono