IRS & Your Coins

I am not sure I agree with you that the change is for "methods of payment" only. Would you expand on that?

In any case the phrase "consideration for property" is vague at best and I should not have posted so quickly. The IRS and eventually the tax courts will have to define "property" in this instance.

This is why I usually just read online...

 

Log in or Sign up to hide this ad.

As I read it, it brings in a new class of people that businesses have to report about: anyone "person" selling property to a business where the aggregate value exceeds $600 in a one year period.

Are there any CT members who are tax lawyers or CPAs that can clear this up?

 

Finally, something I agree with! This topic is brought up every year, at least since I've been here, and it's never even around tax time, and every year it's drug through countless pages of mud. In all honesty, how many people here does this even concern, in real world terms? And of the few it does effect, how many actually go through the process legally?
Guy~

 

I truly hope the language you have written is the language in the Health Care Bill which has caused this outcry.

Unfortunately, I suspect it is NOT and IS law. The reason I suspect NOT is that it was written by people unconcerned with the consequences of new language whose focus was on other subject matter and the bill was passed without even being read by those who voted on it or who would have to implement it. A little more time for legislating and debating the Bill might have allowed things like precise language that you suggest to avoid the panic which has ensued. How difficult would it have been to precisely define the categories of property to be taxed.

The normal distinction between Real and Personal property was left vague as were precise definitions of what constitutes a business. I have no reason to believe the phrase, for services rendered, appears in the Health Care Bill as it relates to taxing all payments of gross proceeds and reporting requirements related thereto. It would be great if it was.

 

I think this language was slid in there because Congress couldn't find any more change under their couch cushions to help pay for the Healthcare bill... I think the language in there was written intentionally.

 

Here is the current tax code concerning 1099-misc

Sec. 6041A. Returns regarding payments of remuneration for services and direct sales
TITLE 26, Subtitle F, CHAPTER 61, Subchapter A, PART III, Subpart B, Sec. 6041A.
STATUTE
(a) Returns regarding remuneration for services
If -
(1) any service-recipient engaged in a trade or business pays in the course of such trade or business during any calendar year remuneration to any person for services performed by such person, and
(2) the aggregate of such remuneration paid to such person during such calendar year is $600 or more, then the service-recipient shall make a return, according to the forms or regulations prescribed by the Secretary, setting forth the aggregate amount of such payments and the name and address of the recipient of such payments. For purposes of the preceding sentence, the term "service-recipient" means the person for whom the service is performed.
(b) Direct sales of $5,000 or more
(1) In general
If -
(A) any person engaged in a trade or business in the course of such trade or business during any calendar year sells consumer products to any buyer on a buy-sell basis, a deposit-commission basis, or any similar basis which the Secretary prescribes by regulations, for resale (by the buyer or any other person) in the home or otherwise than in a permanent retail establishment, and
(B) the aggregate amount of the sales to such buyer during such calendar year is $5,000 or more, then such person shall make a return, according to the forms or regulations prescribed by the Secretary, setting forth the name and address of the buyer to whom such sales are made.
(2) Definitions
For purposes of paragraph (1) -
(A) Buy-sell basis
A transaction is on a buy-sell basis if the buyer performing the services is entitled to retain part or all of the difference between the price at which the buyer purchases the product and the price at which the buyer sells the product as part or all of the buyer's remuneration for the services, and
(B) Deposit-commission basis
A transaction is on a deposit-commission basis if the buyer performing the services is entitled to retain part or all of a purchase deposit paid by the consumer in connection with the transaction as part or all of the buyer's remuneration for the services.

 

"Congress also recently passed a new information reporting provision requiring expanded information reporting on payments made from businesses to corporations, and on payments businesses make for goods."

IRS Commissioner Douglas H. Shulman - May 27, 2010

http://www.irs.gov/newsroom/article/0,,id=223835,00.html

A payment a business makes for goods, could be interpreted as a coin shop buying inventory from anyone, because it happens in the ordinary course of the shops business. I an not saying it will be interpreted that way, I am only saing it could be.

The jist of the Commissioners remarks, if you read the rest of his speech, is that even he dosen't know exactly what this new law means.

"That is why we will be spending the next several months soliciting input from businesses of all types and sizes before proposing regulations to implement the law." - Shulman

My point is that it could be as bad as some people think it will be or as meaningless, there is no way yo tell until the IRS decides how they want to interpret it. Even then it still may end up in tax court.

 

IRS answer just go to the link below and ask & it will tell you


http://search.irs.gov/web/query.html?col=allirs&charset=utf-8&qp=&qs=-Wct%3A%22Internal+Revenue+Manual%22&qc=&qm=0&rf=0&oq=&qt=what+has+to+be+reported+as+income&search.x=13&search.y=15


http://search.irs.gov/web/query.htm...at+has+to+be+reported&search.x=17&search.y=12


The End I hope!

 

The broader the IRS rules and regulation are set concerning this issue - the more likely it will be changed due to voter pressure on Congress.

 

justafarmer;
The IRS only have protocals for the collection of taxes. Congress makes the rules. And yes GDJMSP, Im sorry I brought the whole thing up.

Steve

 

I have been audited once and it was not fun. Trouble was that my income as reported did not match my "lifestyle". When I reported for the audit, they told me, that could not understand how I could only have a reported income of 650 dollars a month yet afford a 1400 dollar a month morgage and a 350 dollar a month car payment. Yes I filed my taxes properly and legally and reported all required income. The confusion came in because I am on SSD, which they didn't check first and also get VA Disability, which is totally non-reportable (to that point you get no 1099-Rs,) Luckly I had kept all my 1099-Rs, SSA-1099's, form 1098's and earned intrest statements from my bank along with my VA Disablity rateing letter which I received back in 1997 and the audit was in 2008. (thank god I had the last 10 years worth)
It was the non-reportable VA disablity that tripped their flags with my taxes.
It was a very nerve wracking experence to say the least, but in the end they agreed I had done nothing wrong.
I guess basicly what I am saying is, yes they do look at lifestyle when they decide to audit.

Dave USNR and Diabled Vet.

 

If they look at mine, they will want to refund me some I wonder if they can use google earth to check out your property?

 

desertgem;
I would suggest to you that all technologies are utilized, but they think nothing of sending an officer out to physically inspect property and other capital assets that are in plain view or that records indicate you own. This is of course if you are having issues with them that are not getting resolved.

 

Ok I a totally confused. If I sale 600 or more dollars to a dealer, than the way I a understanding this, is that the dealer has to issue me a 1099 to account where his 600 dollars was paid out to, and I would have to show this 600 dollars on my income taxes and either prove it was at a lost or gain, meaning that for every coin I buy, I need to have a solid paper trail. Or even if I sell him 300 dollars at one transaction and 400 dollars at another than he would need to issue me a 1099?
Now the question is, how is this going to screw up our poor veterans who under SS disablity *not allowed to make 400 per month with out losing their SSD* or for that matter US Disabled Vets whom the VA says we can not make any earned income at all or lose a vast majority of our VA disablity? I can see a very slippery slop taking place here. Unless I am reading this law totally wrong.

Dave USNR and Disabled VET.

 

Call me crazy, but I don't mind paying a fair tax on things I buy or money I receive. I feel taxes on my home are a bit excessive because of school fnding, but that's really a different issue. I have seen how people live in other countries and Man, no way do I want to see us be like them. Fund whatever it takes to protect my and my family's way of life. We just use the remainder of our money more carefully. IMHO