Late 1099s Lead To Awkward Confrontations at the Gym
According to Reuters, brokerage houses have upset some clients by needing more time to provide 1099s based on a new IRS rule that requires brokerages to report how much their clients spent on equities. Though some houses have informed clients of the delay and recommended extensions, some folks aren't too happy about that, including random […]
President Obama Puts 1099 Reporting Requirement Down for the Dirt Nap
Today, I was pleased to take another step to relieve unnecessary burdens on small businesses by signing H.R. 4 into law. Small business owners are the engine of our economy and because Democrats and Republicans worked together, we can ensure they spend their time and resources creating jobs and growing their business, not filling out more paperwork. I look forward to continuing to work with Congress to improve the tax credit policy in this legislation and I am eager to work with anyone with ideas about how we can make health care better or more affordable. [WH]
Senate Manages to Stay Out of Its Own Way, Passes 1099 Repeal
Now that the repeal has passed, where will all the energy spent on pandering to small businesses go?
Bowing to pressure from business groups worried about an avalanche of paperwork, the U.S. Senate voted on Tuesday to rescind a tax-reporting requirement included in last year’s healthcare overhaul law.
With bipartisan support, the Senate voted 87-12 to pass legislation sponsored by Republican Senator Mike Johanns that repeals a requirement for businesses and landlords to file a Form 1099 document with the Internal Revenue Service for purchases of goods and services exceeding $600 a year.
President Obama is expected to sign the bill at which point GOP leaders are expected to criticize him for something.
US Senate votes to repeal healthcare tax measure [Reuters]
Just a reminder: Oh, By the Way, There’s Still a New 1099 Reporting Requirement for 2012 in the Proposed Budget
Congress Continues to Successfully Drag Out the 1099 Repeal
If only somehow they could kill it completely, could we fully revel in the disfunction of the legislative branch:
What is clear is that nothing is certain with moving a 1099 repeal. The House passed a standalone measure on March 3 and the Senate tacked on an amendment to the Federal Aviation Administration (FAA) authorization bill, which passed the upper chamber, each with different offsets to cover the costs of the repeal.
The White House and House and Senate lawmakers across both parties back the elimination of the 1099 provision from the healthcare law but are at odds over how to make up for $22 billion in lost revenue as projected by the Joint Committee on Taxation.
Fate of 1099 repeal still up in the air [The Hill]
Earlier: How Will the Senate Screw Up the 1099 Repeal Bill This Time?
Even Earlier: Vastly Unpopular 1099 Requirement Survives Thanks to the Reliable Dysfunction of the U.S. Senate
During the 1099 Repeal Debate, a Democrat More or Less Called a Bunch of Republicans Liars, Then Took it Back, and Then May Have Called Them Liars Again
The repeal of the 1099 reporting provision of the healthcare reform bill was finally passed by the House today but not before things got a little awkward when Represenative Earl Blumenauer (D-OR) “said Republican claims that the law is a government takeover of healthcare had been deemed ‘the 2010 political lie of the year.’ ”
Now, on its surface, this seems like a little bit of tangential grandstanding by the man-child gentleman from Oregon but his colleague Dan Lungren (R-CA) didn’t appreciate the remark and was not about to let this slide:
Blumenauer seemed to gesture toward Lungren, who had just finished speaking, and said the Republican member called the healthcare law a government takeover.
Lungren did not directly say the law is a government takeover, but did criticize the laws in other ways.
After Blumenauer’s “lie of the year” comment, Lungren quickly interrupted to raise a point of order and ask whether Blumenauer should be allowed to say, or imply, that Lungren is a liar.
Blumenauer – not to be outdone – countered this challenge with one of his own:
Asked if he was demanding Blumenauer’s words be “taken down” — a challenge to their propriety — Lungren said no, but did ask the acting Speaker to warn members about referring to colleagues in this way.
The exchange continued: Blumenauer said he was simply citing a Politifact finding that Republican claims of a government healthcare takeover are the political lie of the year. Lungren then immediately asked that Blumenauer’s words be taken down.
Blumenauer, knowing he was beat, then capitulated (he’s a Democrat, after all), “Several minutes later, Blumenauer asked unanimous consent to strike his words,” and then thought better of it, “[he] repeated the Politifact citation again in his explanatory comments.”
“I’m not calling anybody a liar,” Blumenauer said. “What I intended to say … is that as we have repeated talking points about a government takeover of healthcare, this has been judged by an independent undertaking as the political lie of the year.”
It could probably go either way but someone seems to be getting called a liar in there somewhere.
Lawmakers spar over ‘lie of the year’ in debate over healthcare provision [Floor Action/The Hill]
Oh, By the Way, There’s Still a New 1099 Reporting Requirement for 2012 in the Proposed Budget
As you know, the bane of small businesses across this great land, the 1099 reporting requirement, was repealed by the Senate earlier this month. Despite some maneuvering amongst Senators to be crowned the biggest champion of small business, it seems that everyone agreed that this little sliver of the healthcare reform bill needed to go.
Now the House has taken up the charge but The Hill reports on a portion of President Obama’s proposed budget that is already annoying the hell out of some:
President Obama’s fiscal year 2012 budget still contains a portion of the 1099 provision while eliminating the requirement for goods but retaining it for services. The proposal is expected to raise about $10 billion over 10 years.
The National Federation of Independent Business blasted the new 1099 proposal as a “bait and switch.”
“We are disappointed that the president has not clearly heard what small businesses are saying,” NFIB senior vice president of Federal Public Policy Susan Eckerly said in a statement. “We at NFIB remain committed to helping the president and Congress understand the needs of small business as the budget process moves forward.”
But before you get your panties in a bunch, the Office of Management and Budget can explain:
“The administration recognizes the burden that this expanded information reporting provision will put on small businesses and proposes to repeal the provision,” the document says. “Instead, the administration proposes that a business be required to file an information return for payments for services or for determinable gains aggregating to $600 or more in a calendar year to a corporation (except a tax-exempt corporation); information returns would not be required for payments for property.”
If you call that an explanation.
Ways and Means schedules mark up of 1099 provision [The Hill]
As Predicted, There’s a Battle Over Who Will Get Credit for the 1099 Repeal
The repeal of the 1099 provision in the healthcare reform law has been dogging Congress since the bill was signed into law last March. Because small businesses will no doubt lead the economic recovery, remove all the snow that has dumped on this great land and may just get the Egypt situation under control, every pol within a stone’s throw of the Potomac is trying to get their name on this thing. Nebraska’s Mike Johanns (R) and West Virginia’s Joe Manchin (D) seemed to have this locked up but as we surmised, other Democrats are trying to get in on some of this small business saving action.
The Hill’s On the Money blog has the latest:
Senate Republicans expressed some confusion and approval Wednesday that their push to repeal the unpopular 1099 provision from the healthcare law has been taken over by Democrats.
Sen. Debbie Stabenow (D-Mich.), who has signed onto a bipartisan bill sponsored by Sens. Mike Johanns (R-Neb.) and Joe Manchin (D-W.Va.) that has the support of 61 lawmakers, proposed her own amendment that adds five words to the Johanns-Manchin repeal measure ensuring that no “unobligated funds” are used from the Social Security Administration.
So Senator Stabenow’s little maneuver has her nicely positioned to lay claim as a champion of all the Mom and Pop shops out there and shockingly, Minority Leader Mitch McConnell is cool with it:
“It turns out Senator Johanns did such an outstanding job raising awareness about the 1099 requirement that Democrats took the idea and are now claiming it as their own,” Senate Minority Leader Mitch McConnell (R-Ky.) said. “Which is fine with us. It’s not a bad precedent actually. We’ve got a lot of other good ideas that we’d be happy to share.”
While Senator McConnell sounds like he’s fine with Stabenow semi-jacking the bill, a staffer was less impressed:
“Dems went from putting it in the bill, to opposing the fix, to sponsoring a different fix, to sponsoring the Republican bill,” one senior Republican aide told The Hill.
Gotta love politics.
Senate Republicans express confusion over 1099 amendment [On the Money/The Hill]
How Will the Senate Screw Up the 1099 Repeal Bill This Time?
The upper chamber is making yet another run at repealing the 1099 requirement that was part of the healthcare overhaul despite miserable failures in the past.
The Hill reports that the new bill has 52 co-sponsors which lead you to believe that this time, repeal will be a cinch:
Senators reintroduced bills that would eliminate the 1099 requirement for businesses to report annual purchases of at least $600 from each vendor. Most Democrats, including the Obama administration, support repealing the provision, but lawmakers have clashed over how to offset the $19 billion in lost revenue.
A bill introduced Tuesday by Sens. Mike Johanns (R-Neb.) and Joe Manchin (D-W. Va.) authorizes the Office of Management and Budget to identify unobligated federal funds to cover the cost of repeal.
“It’s a bad policy; it hurts businesses and it should be repealed, enough said,” Johanns said in a conference call with reporters.
The measure has 52 co-sponsors including 12 Democrats: Sens. Mark Begich (Alaska), Michael Bennet (Colo.), Maria Cantwell (Wash.), Kay Hagan (N.C.), Amy Klobuchar (Minn.), Manchin, Ben Nelson (Neb.), Mark Pryor (Ark.), Debbie Stabenow (Mich.), Jon Tester (Mont.), Mark Udall (Colo.), Mark Warner (Va.).
With such an overwhelming show of bipartisan support the only issue now is who will get the credit for saving small business as we know it?
Both parties have seized on the 1099 requirement to score political points. Republicans are posing repeal of 1099 as part of their promise to chip away at the reform law, while Democrats are touting it as a sign of their willingness to improve the current law.
Just for the sake of spiteful mischief, we’re hoping this goes nowhere (any and all theories on how they manage to do that are encouraged). Stay tuned!
Senators introduce bipartisan 1099 repeal bill [On the Money/The Hill]
John Boehner Would Prefer If Some People Took Their Bellyaching About the 1099 Requirement Elsewhere
It seems that everyone and their dog is staking a claim as the biggest enemy of the 1099 requirement that was part of the healthcare reform law that passed last year. The latest self-proclaimed champions of small business are a few Senate Democrats who wish John Boehner would quit sitting on his orange hands and get a bill moving in the House, because let’s face it, the repeal passed by the House is going nowhere fast.
The Speaker is not deterred however, and his spokesman would like to remind the Ds in the S, that they can S a D and should bring it up with someone else:
Michael Steel, a spokesman for Boehner, said the speaker also supports eliminating the 1099 requirement, but “it is far from the only job-destroying provision in Washington Democrats’ law.”
“Now that the House has passed a law to repeal it, the best course would be for the Senate to do the same, and I hope these senators are pressing Senate Majority Leader Reid to do just that,” said Steel.
Earlier:
Vastly Unpopular 1099 Requirement Survives Thanks to the Reliable Dysfunction of the U.S. Senate
Vastly Unpopular 1099 Requirement Survives Thanks to the Reliable Dysfunction of the U.S. Senate
Everyone’s favorite Two Minutes’ Hate from the healthcare reform legislation – the 1099 reporting requirement – managed to live to fight another day despite being as unpopular as the Democrats who originally got behind it (although don’t look at Nancy Pelosi).
As is the wont of Senate, this sliver of bipartisanship was foiled by…wait for it…politics:
The provision survived because of the complex politics of the Senate. Some lawmakers were reluctant to back repeal on Monday since the rule change would have been added to a popular food-safety law that is nearing approval, potentially jeopardizing its passage. In addition, dueling Democratic and Republican proposals allowed lawmakers to register their disapproval of the 1099 requirement whether the repeal passed or not.
In other words, everyone agrees that they hate this thing but they hate it in different ways. You see, it’s not enough to be against the 1099 requirement, it matters who gets the credit for being against so much that they actual introduced the proposal to do away with it.
Sigh. But it’s cool, the rule doesn’t actually go into effect until 2012, so blowing it off for another 12 months is totally an option. And a pretty realistic one, too.
Senators Cannot Agree on Fix to the Health Law [NYT via CPA Success]
Surprisingly, Glenn Beck Doesn’t Understand How the 1099 Requirement Works
Everyone agrees that the 1099 requirement in the healthcare overhaul sucks. It’s so unpopular that Max Baucus has taken it upon himself to ride in on the Senate chamber on a horse clad in shining armor with an amendment that will repeal the requirement pronto and single-handedly save small businesses everywhere.
But in the meantime, area man-cum-national fruitcake Glenn Beck thought he needed to warn all the eBay junkies out there that if don’t hock their stuff this year, they’ll be subject to the requirement next year:
Of course this is bullshit. Despite what GB might think about the national media, if this were in fact true, every outlet on the planet would have reported it already. The headlines would have screamed “WAR ON EBAY” and Meg Whitman could have campaigned on that (but probably still would’ve lost).
Anyhooo, just for good measure, The Hill’s Healthwatch also points out that Beck’s “exemption” claim is also false:
Beck also told his viewers on Tuesday’s show that “at least 111 companies have been declared exempt from having to use Obamacare.” In fact, the firms he refers to have been granted a one-year waiver from the requirement that their annual limit on coverage be at least $750,000.
“Exempt” versus “a one-year waiver.” Yeah, that’s almost the same thing.
The AICPA Teaches Congress What “Burdensome” Really Means
On July 19, the AICPA sent a letter to the House and Senate condemning new 1099 reporting requirements (said requirements being carefully hidden inside The Patient Protection and Affordable Care Act a.k.a. Obamacare) as burdensome and annoying. Apparently the AICPA must feel quite strongly about this matter as it is now November and they have sent a very similar letter to Congress, perhaps to show them just how burdensome extra paperwork can really be.
The House letter may be found here.
The AICPA doesn’t like that rental property owners could now be required to keep extensive records and bother with tax issues in typically tax-free January, among other things:
This would be the first time that individual taxpayers owning rental property who are not “engaged in a trade or business,” would be required to provide Forms 1099-MISC. For example, many individuals, who own a vacation property that is rented part of the year to help defray their costs, would be subject to the provisions of the SBJA. We are concerned that (1) keeping records to track expenses by provider, (2) obtaining tax identification numbers and other information from providers of property and services, and (3) providing Forms 1099-MISC during January, a month when taxpayers would not normally be focused on tax issues, would be extremely burdensome. Additionally, the AICPA questions the need for sending information forms to certain providers of services, such as utility companies.
Thankfully the AICPA has everyone’s back and feels as though business owners should be allowed to focus on growing their businesses instead of worrying over filling out massive amounts of paperwork. We’ve got to appreciate that attitude as any other professional organization might salivate over the idea of plenty of billable hours to go around as CPAs line up to hook up business owners with the right paperwork but not the AICPA, who said “businesses do not need the added cost of more regulatory requirements at a time when their efforts must be focused on profitability and sustainability.” Word!
We look forward to the next round of angry letters from the AICPA on this matter and hope that they don’t find fighting Congress too burdensome.
Nancy Pelosi Will Have You Know That She Wasn’t Responsible for the New 1099 Requirement Sneaking into Healthcare Reform
“One item that I think we all agree on that was in the Senate bill, not in the House bill, but became part of the law was 1099, which affects small businesses and small contractors and how they report their transactions. They know what it means, and they know they’d like to see it go. I think that’s probably the first place we could go together.”
~ The soon-to-be former Speaker of the House is willing to talk about this one.
The 1099 Party Is Still on for 2012
If the GOP took the “think of all the trees you’re killing” angle, maybe they could have convinced more Democrats to kill the 1099 free-for-all. Unfortunately, they stuck to the usual “red tape is un-American and stealing our freedom” narrative and it didn’t impress.
Senate Democrats defeated an attempt by Republicans to lift a tax-reporting requirement that small businesses face in a move that would have stripped away $17 billion earmarked to help pay for the sweeping health-care law.
In a 46-52 vote, the majority overcame an effort by Senate Republicans to scrap the reporting requirement which was inserted to the health-care legislation that was signed into law by President Barack Obama earlier this year.
The Republicans would have needed 60 ‘yes’ votes to be successful. Seven Democrats sided with the Republicans to support removing the requirement.
The Republican effort was led by Sen. Mike Johanns (R., Neb.), who has argued it is simply piling on unnecessary red tape on small-business owners at the same time as the federal government looks to them to lead the job-creation recovery.
The rule requires businesses to report to the Internal Revenue Service payments to suppliers and service providers that exceed $600 in a single year. It is set to be implemented in 2012.
Regulatory Uncertainty Leaves Small Businesses Reluctant to Hire
I know of only one small business owner who has confidently added staff throughout the recession and that’s only because A) he’s really cocky (in the best way, of course) and B) he absolutely needed to in order to survive. Lucky for him he ended up in a fairly recession-proof business and in fact, the recession has been kind as it has driven all sorts of new business to him as the unemployed and jaded look for new career options. But he’s a fluke success and not all small business owners can say they’ve weathered the last two years as well as he has.
Dallas Fed President Richard Fisher and former St Louis Fed President William Poole both feel the hiring problem is based not on the fact that businesses can’t afford it but because business owners are too unsure of the regulatory environment to confidently add staff. I am going to have to agree with them on this one.
Said Fisher in a recent speech:
For some time now in internal discussions with my colleagues at the Fed, I have ascribed the economy’s slow growth pathology to what I call “random refereeing”—the current predilection of government to rewrite the rules in the middle of the game of recovery. Businesses and consumers are being confronted with so many potential changes in the taxes and regulations that govern their behavior that they are uncertain about how to proceed downfield. Awaiting clearer signals from the referees that are the nation’s fiscal authorities and regulators, they have gone into a defensive crouch.
Case in point, Obamacare’s insidious 1099 requirement that we’ve covered plenty up to this point and will continue to cover so long as it threatens to cripple businesses with unnecessary busywork. The House had a chance to kick the requirement in the balls last with with the Small Business Paperwork Mandate Elimination Act (H.R.5141) but failed to pass it, leaving us right back where we were*.
Business owners – and small business owners in particular as they tend to have less capital and fewer chances to “warehouse” out their employee insurance needs in bulk – are understandably reluctant to plug more money into the economy if they are unsure as to how much it’s going to cost just to hire on new staff. Many businesses could hire at this point but have chosen not to simply because they have no idea what sort of financial impact hiring will have on them in the future once new rules are fully written out and implemented.
Seems a bit counterproductive when we’re trying to claw our way out a recession, doesn’t it?
*Full Disclosure: JDA is long Caterpillar at this point in anticipation of the number of bulldozers that will be required just to keep up with the 1099 goodness. How is this helping the economy heal again?
Accounting News Roundup: PwC Chips in $12.5 Million for J.P. Morgan’s FSA Fine; IRS Not Returning to Austin Crash Site; Senate Working on Proposal to Scale Back 1099 Requirements | 08.09.10
PwC To Provide Up To $12.5M To JPMorgan For FSA Fine [Dow Jones]
“J.P. Morgan Chase & Co. (JPM) disclosed in a regulatory filing Friday that PricewaterhouseCoopers LLP agreed to provide up to an aggregate of $12.5 million to the bank related to a fine J.P. Morgan had to pay to the U.K. Financial Services Authority.”
Late Ponzi schemer’s accountant surrenders license [Nashville Business Journal]
This accountant managed to surrender his CPA in just under four months for his role in a Ponzi scheme. Dave Friehling had to be stripped of his license nearly 9 months after pleading guilty. NY DoE should get with Tennessee and see how they do things.
IRS to stay at new Austin site after plane crash [AP]
“An Internal Revenue Service office will not return to the Texas building where a tax protester killed himself by crashing his plane into the structure.
IRS spokeswoman Lea Crusberg said Thursday that the agency has signed a two-year lease on another office space in Austin. She declined to identify the location.”
Senate Democrats Propose Scaling Back IRS Reporting Law [WSJ]
“The Nelson proposal would exempt from the reporting rules firms with fewer than 25 employees. For larger businesses, it would require information returns only in cases where payments to a single vendor exceeded $5,000 in a given year—down from $600 in the health-care law.”
Richtermeyer to Chair Management Accountants [Web CPA]
“The Institute of Management Accountants has named accounting professor Sandra Richtermeyer as the chair of its board of directors for the 2010-2011 fiscal year.
Richtermeyer, who also chairs the Department of Accountancy in the Williams College of Business at Xavier University in Cincinnati, is only the fourth woman ever to hold the position of IMA chair since the organization’s inception in 1919.”
BKD looks to grow health care practice with purchase of Grant Thornton team [Wichita Business Journal (partial subscription required)]
According to the message sent from Stephen Chipman, that we reported on at the end of July, this is the final transition that Grant Thornton will be making. What happens from here is anyone’s guess.
Accounting News Roundup: 1099 Reporting Is the Latest Political Football; Financial Reporting Overhaul in the Works?; Zynga’s CFO Hire Spurs IPO Talk | 08.02.10
Parties Play Politics With Unpopular Tax Measure [WSJ]
The new 1099 reporting requi a bit of belly aching to point of many groups asking for a repeal. Too bad the members of Congress are the ones with the power to actually make something happen:
“The House rejected a bill Friday that would have repealed the provision. The two parties disagreed on how to make up the lost revenue.
‘This foolish policy hammers our business community when we should be supporting their job growth,’ Sen. Mike Johanns of Nebraska said in the Republicans’ weekly radio and Internet address Saturday. ‘It’s only one example of how the administration’s promise to support small businesses really rings hollow.’
Democrats blamed Republicans for Friday’s failure.
‘Despite all of their rhetoric about the need to eliminate this reporting requirement, Republicans walked away from small businesses when it mattered most,’ said Rep. Sander Levin (D-Mich.), chairman of the House Ways and Means Committee.”
FASB Alumnus Trashes GAAP (and IFRS) [The Accounting Onion]
“I suspect that the folks being paid the big bucks to make the tough calls on accounting standards don’t pay a lot of attention to to the likes of Tom Whatshisname, even were I to announce that the sky is falling. But, I don’t take it personally. Over the past 40 years, any PhD not drawing a salary from the Big Four has been viewed with more suspicion than respect by the standard setting establishment.
I mention all of this now, because there is a new voice, whose credibility and qualifications cannot be so easily dismissed. That voice belongs to FASB alumnus David Mosso, who has written an 80-page monograph entitled Early Warning and Quick Response: Accounting in the Twenty-First Century). If you don’t want to believe me, take it from him: GAAP is broken.”
Group formed to overhaul financial reporting [Accountancy Age]
Meanwhile: “A project to overhaul company reporting has been launched by a high level group of accountants, businesses, regulators and market participants.
The International Integrated Reporting Committee will look at the wider concerns about financial reporting, in terms of addressing risk, and presenting a clearer and broader picture of companies’ performance, including governance and environmental issues.”
Goldman Details Its Valuations With AIG [WSJ]
“How did Goldman come up with the mortgage-securities prices it used to extract cash from AIG?”
Before There Can Be An IPO, First Comes A New CFO For Zynga [Tech Crunch]
Dave Wehner comes in from Allen & Co. taking the spot of Mark Vranesh who is becoming Chief Accounting Officer. What does all this mean? First, it gives most MSM outlets a day or two worth of stories about when Zynga will go public but mostly it means the business of Farmville, no matter how you hate it, is serious business.
Facebook Would-Be Owner Says He Owes His Claim to Arrest [Bloomberg]
“Paul Ceglia, who claims in a lawsuit that he owns 84 percent of Facebook Inc., said his case wouldn’t have been possible if state troopers hadn’t come to his house in October to arrest him for fraud.”
Forced Employee Engagement and the Overworked Employee [The Exuberant Accountant]
“In my many interactions with business owners, I have heard some speak of employees as being ‘lucky to still have a job.’ While that may be true, thinking (and acting) in such a manner is very short sighted.”
Twitter, Facebook, LinkedIn? [AccMan]
Got business model?
The AICPA Goes to Bat for Small Business; Requests Repeal of Expanded 1099 Reporting
In these pages last week, we brought up the expanded 1099 reporting requirements that could possibly bury some small busine ocumentation. The question remains, how big is this pile? Will it require a shovel to dig out of the pile of paper or a bulldozer?
Based on the AICPA’s letter to the U.S. Senate that made the rounds yesterday, it will require a team of angry Ohioans – all with their own dozer – to unbury small business owners.
Alan Einhorn, the Chair of the AICPA’s Tax Executive Committee wrote the letter and in extremely tactful terms, expresses his discontent, “[W]e believe section 9006 of the Act should be repealed because the provision imposes extremely burdensome information reporting requirements on business taxpayers that cannot be justified in terms of the limited utility such information reports will provide to government.”
Adrienne boils that down in a less tactful manner, “You don’t have to be a CPA to see why this is a completely moronic idea. What happened to paperwork reduction? I love the use of ‘extremely burdensome’ – as most of you probably know, it’s got to be REALLY annoying to get the accountants to bust out the ‘extremely’ in a complaint.”
She makes a good point. Not to get all English-y on you but the adverb “extremely” doesn’t exactly make it a more effective sentence. Alan was clearly going for exaggeration in order to get his point across that this portion of the Patient Protection and Affordable Care Act is the most useless section of the entire act. And for some of you, that’s really saying something.
AICPA Letter to Congress Supporting Repeal of Expanded 1099 Reporting by Businesses
How Big of a Burden Will the New 1099 Reporting Requirements Be for Small Businesses?
This story is republished from CFOZone, where you’ll find news, analysis and professional networking tools for finance executives.
Slipped into the health care reform bill passed in March was a new tax reporting regulation likely to create a huge burden for businesses, something we wrote about recently. Now a government watchdog, the National Taxpayer Advocate, is questioning the rule’s potential unintended consequences for small companies.
Plus, it looks like the regulation won’t raise a heck of a lot of money anyway.
The rule would require anyone with business income to issue 1099 tax forms to all vendors from whom they bought more than $600 worth of goods and services that year.
In her report, Nina Olson, the Taxpayer Advocate, warned that the rule could prove to be an unacceptable added burden for small businesses, which would face a virtual cyclone of new paperwork to comply with the regulation. “The new reporting burden, particularly as it falls on small businesses, may turn out to be disproportionate as compared with any resulting improvement in tax compliance,” she wrote. And the rule could also give an unfair advantage to large suppliers that have the resources to help customers track purchases.
What’s really going on here? The regulation, which would take effect in 2012, seems to be yet another attempt by federal and state government agencies to shore up revenues by cracking down on unpaid tax liabilities–and taking steps that intentionally or unintentionally impact small businesses in particular. For example, a bevy of agencies, plus Congress, are on a regulatory jihad against corporate misclassification of independent contractors. And there are reports that the IRS is especially eyeing small businesses in that crackdown.
Thing is, like that effort, the new 1099 tax reporting regulation isn’t likely to reap a whole lot of money. For example, the nonpartisan Joint Committee on Taxation recently estimated the rule would raise an underwhelming $2 billion annually in added revenue, according to CNNMoney.com.
Will the Taxpayer Advocate’s remarks have any effect? Even before Olson’s report, there were signs that the IRS had started to backtrack. For example, the IRS announced in May that the rule won’t include transactions made through credit and debit cards. As the tax agency addresses all the compliance complexities of the rule, it’s likely to make other changes, as well.
But with government agencies in desperate need of money, the reporting rule isn’t going to disappear completely.
1099s Are All Evidence We Need to Conclude That Tiger Paid for Sex
By now, we’re sure you’ve heard that Madam Michelle Braun has claimed that Tiger Woods not only paid $60k for sex but that both Holly Sampson and Jamie Jungers, two of T. Dubs [insert most recent number here] mistresses, were prosties for her.
It doesn’t sound like Tiger got down with either of the them while they were hooking for Braun (it was just regular throwing money around type stuff) but the Post does quote Braun about TW being a big fan of the ‘girl-on-girl’ action and ‘booze and sex bender[s].’
ANNNNNND they’ve got 1099s for both Sampson and Jungers. So does anyone doubt that the greatest golfer the world has ever known is basically the same as Eliot Spitzer? We’re sure convinced!
Seriously, if a madam goes to the trouble of filling out 1099s for non-employee compensation, we’ve got no reason to disbelieve anything she says.
You may now return to your regularly non-accounting related Tiger Woods coverage.
Woods ‘bought’ cathouse gals [NYP]
jungers_sampson_1099.pdf
Also see: Lesson Learned: Even Madams Pay Their Taxes [Tax Girl]
Today in Bad Decisions: Borrowing Money from Your Ex-Mother-in-Law
Do you have a mother-in-law? How well do you get along with her? Not good, huh? Whatever differences you may have, surely it’s not this bad:
When a former son-in-law in Illinois failed to settle an asserted loan by his ex-mother-in-law to her satisfaction, she gave up on collecting but issued a 1099-C reporting the amount as debt forgiveness income.
Ex-Son-in-Law took it badly, and fought back. He sued Ex-Mom, claiming that because she wasn’t required to issue a 1099-C, it was fraudulent for her to do so.
Borrowing money from your mother-in-law, let alone your ex-mother-in-law is not what we would consider a good life decision. Jesus, especially if you’re a deadbeat. We understand that times are tough but hey, next time around he’ll know.
So this guy is in a tough spot. Solution? Sue her for fraud, of course! The judge in the case said someone issuing an unnecessary 1099 did not constitute fraud so the son’s only remedy now is to argue that the contents of said 1099 were fraudulent. Good luck with that, man. You’re finished.
A Victory For Bitter Ex-Mother-In-Laws Everywhere [Tax Update Blog]