New Law Will Require 1099 On All Buys Over $600

By Michael Pennington © Copyright 2010 Pennco Coins

Consistent with their desire to increase revenue at every turn and to acquire more and more of our personal freedoms, the current administration sneakily included in the Obamacare bill a requirement that every seller 1099 every buyer on amounts purchased over $600.
This law requires any person engaged in a trade or business to file an IRS Form 1099, reporting all payments totaling $600 or more in a calendar year to any single person, other than a tax-exempt corporation (non-profit). If you sell your used car for $750, you’d better pay tax on that transaction! And you are responsible for getting the buyer a 1099 form and, at the same time, submitting them to the IRS.
And when you mail off your rent check for your equipment bay, guess what…Time to send the old 1099s to the IRS and your landlord.
But that’s not all!
Even corporations are affected.
That’s right. That John Deere lawnmower you just bought? Again, you’ll need to mail a 1099 to the IRS and John Deere.
Until now, IRS 1099 forms have been used to track and report miscellaneous income paid for services of independent contractors or self-employed individuals.
Under current U.S. law, payments to corporations — except those for medical or health care services — are not required to be reported to the IRS. Now almost all corporations will be affected. As a result small businesses around the nation are fit to be tied because increased costs means less profit for the business and less revenue for the IRS.
Just think for a minute about every financial transaction between businesses and individuals or other businesses which exceed $600…

That’s a whole lot of paperwork! Hard on small business, hard on big business. That translates to, “hard on the economy.”

Is this really the time to be creating extra hassles for small businesses struggling to stay afloat?

Every U.S. business, and individuals as well, will be forced to obtain the tax ID number and/or the Social Security number of everyone with whom they do more than $600 worth of business in a year.

It takes effect on Jan. 1, 2012 — and it applies to all U.S. business and private transactions.
Based on 2009 IRS data, about 40 million businesses and other entities will be subject to this 1099 debacle, at greatly increased cost and trouble.
There’s only one word to describe the paperwork and reporting requirements: Draconian.
Small-business owners are already complaining that the time and effort it will take to obtain this documentation will be a drag on business. That’s assuming that a lot of small transactions aren’t driven to the black market!

This provision is based on the IRS’s unproven belief that millions of Americans are evading taxes.  Just because Charlie Rangel, Tim Geithner and other high ranking officials are admitted tax evaders doesn’t mean everyone is a lawbreaker.
The bureaucrats’ idea is that IRS computers can process hundreds of millions of Form 1099s, comparing them against each buyer’s Form 1040, to see if reported income and purchase numbers match.

Of course, this onerous restriction was never explained during the health care debate in Congress — and if it had been it would have likely been defeated. But that’s what you get when you can’t determine what’s in a spending bill until it becomes law. Shame on Congress.
This is yet another example of legislators using sneak provisions in an inches-thick bill to impose policies that would otherwise have been rejected. The same tactic was used in March when the “HIRE Act” was adopted containing a potential 30% tax on offshore banking transactions by U.S. persons.

And Healthcare was the law that Obama insisted would impose no new taxes.
Precious metals such as coins and bullion fall into this new 1099 category and U.S. coin dealers are among those most outraged by the new law.
And it’s on privacy buffs’ and freedom lovers’ radars for another reason.
Those who remember history recall that Americans’ freedom to own gold (except for jewelry, dental, and numismatics) was made illegal after 1933, when President Franklin D. Roosevelt issued an executive order prohibiting gold ownership.

Those who value their right to own gold note the obvious:
The 1099 reporting rule will tell IRS agents who owns gold and where they live.
Will this administration confiscate your only “sovereign currency”?
It remains to be seen. But here’s what you can do to protect yourself now:
Are there any legal ways around this new attack on privacy and personal freedom?
The act defines a “financial agency” as “a person acting for a person as a financial institution, bailee, depository trustee or agent, or acting in a similar way related to money, credit, securities, gold, or in a transaction in money, credit, securities or gold.”
On the other hand, gold you store yourself in a safety deposit box or private vault to which only you have access doesn’t appear to be reportable — yet.
Fortunately, as this provision doesn’t go into effect until January 2012, you have more than a year to “stock up” on gold and silver bullion.

There’s still more than a year for this provision to be replaced, possibly by a friendlier Congress in 2011. But regular additions to your gold and silver bullion stockpile today will alleviate a potential headache of paperwork tomorrow.
If you’ve been making excuses to put off your purchases of gold and silver, Congress has just given you the best reason to take action and protect yours.

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About Pennco Coins

Pennco Coins
This entry was posted in Buffalo, Bullion, Coin, Dollar, Eagle, Federal Reserve, Gold, Gold to Silver Ratio, Government, Investment, Maple, Mint, Palladium, Peso, Philharmonic, Platinum, Silver, Tax and tagged , , , , , , . Bookmark the permalink.

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