TAX ALERT: Repeal the Hidden 1099 Burden on Business

Tell Congress to Repeal the Hidden 1099 Burden on Business

Did your company buy a new computer this year? Submit your 1099.
Did your company host a conference or annual event? Submit your 1099.
Has your company spent more than $600 on plane tickets? Submit your 1099.

Hidden in the new healthcare bill, if your business spends more than $600 with a vendor this year, your business now needs to file a 1099 form. A new computer, cross-county plane tickets or several meals at a favorite restaurant will now require more tax paperwork and accounting expenses.

It is important to note, if a business spends more than $600 annually on plane tickets with multiple airlines, or at multiple restaurants then the company will be filing a 1099 for each vendor.

Tell your congressman to support the Small Business Paperwork Mandate Elimination Act to repeal the hidden 1099 burden on business.

Section 9006 of President Obama’s new healthcare bill requires all businesses to issue 1099 forms to all vendors from whom they annually purchase $600 or more in goods or services. Businesses will be required to file hundreds of 1099 forms to their vendors and process hundreds of 1099 forms from their clients and customers.

This 1099 burden will weigh heaviest on small businesses.

– Small businesses with numerous transactions over $600 (local computer repair stores, mechanic shops, office supply companies and attorneys) will be required to process hundreds of 1099 forms each year when filing their tax returns.

–  Small businesses will have to collect information and tax identification numbers for every vendor they use, just in case the annual total of purchases from the vendor exceeds $600.

–  Large corporations will be discouraged from using local vendors and small businesses since each vendor will require more paperwork and a separate 1099. Using numerous local, small businesses would require numerous 1099 forms while making all purchases from a large, retail chain store would only require one 1099.

– Hundreds of 1099 forms will increase accounting costs and administrative burdens that will be especially crippling for small business.

Tell your congressman to support the Small Business Paperwork Mandate Elimination Act to repeal the hidden 1099 burden on business.

Will all this new paperwork help make the IRS more transparent or efficient? NO!

According to the National Taxpayer Advocate Service, a division of the Internal Revenue Service, “[the IRS] will face challenges making productive use of this new volume of information… it is highly likely that the IRS will improperly assess penalties that it must abate later, after great expenditure to the taxpayer and IRS time and effort.”

Tell your congressman to support the Small Business Paperwork Mandate Elimination Act to repeal the hidden 1099 burden on business.

If even the IRS thinks it is unnecessary, then it can’t be good!