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Some News Re New 1099 Reporting Requirement
RichR
Posts: 3,984 ✭✭✭✭✭
For those who might not have caught this, the following appeared in the 9/20/2010 issue of Coin World (page 10):
"In an Aug. 30 e-mail to a constituent, Sen. Ben Nelson (Neb.), indicated that IRS Commissioner Douglas Shulman has stated that the IRS plans to exempt business transactions conducted using debit and credit cards from the new reporting requirement."
If true/accurate, any thoughts?
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The biggest problem is the mandate to use social security numbers on these reports. More use of social security numbers = more identity theft.
We and probably most dealers get names and addresses on all of our purchases; the IRS knows where everyone is and what their SSN is, why do we have to go through the gauntlet of collecting SSN's? "Gauntlet" includes asking for the SSN, getting refused, having to explain the regulation, debating the issue, listening to complaints about the regulation, etc. All of which takes time and adds exactly zero to the bottom line.
Just my 2c.
An authorized PCGS dealer, and a contributor to the Red Book.
TD
(Edited for clarity)
<< <i>"In an Aug. 30 e-mail to a constituent, Sen. Ben Nelson (Neb.), indicated that IRS Commissioner Douglas Shulman has stated that the IRS plans to exempt business transactions conducted using debit and credit cards from the new reporting requirement."
If true/accurate, any thoughts? >>
Correct. We have already reported this right here several weeks ago.
<< <i>how can I pay you with the company credit card? >>
What if you put the money on a prepaid debit card - like the ones you find at your local gas station?
Charge a nominal fee or it to cover your time, etc. PLUS this card is reloadable so for those customers who buy and sell more than $600 the card can become your 'vehicle' for transactions?
<< <i>For those who might not have caught this, the following appeared in the 9/20/2010 issue of Coin World (page 10):
"In an Aug. 30 e-mail to a constituent, Sen. Ben Nelson (Neb.), indicated that IRS Commissioner Douglas Shulman has stated that the IRS plans to exempt business transactions conducted using debit and credit cards from the new reporting requirement."
If true/accurate, any thoughts? >>
Plus it's only for business to business transactions, right? Are they still saying that?
If a business buys from the public or if the public buys from a dealer, they are both example of exempt transactions?
- Ian
Owner/Founder GreatCollections
GreatCollections Coin Auctions - Certified Coin Auctions Every Week - Rare Coins & Coin Values
<< <i>
<< <i>For those who might not have caught this, the following appeared in the 9/20/2010 issue of Coin World (page 10):
"In an Aug. 30 e-mail to a constituent, Sen. Ben Nelson (Neb.), indicated that IRS Commissioner Douglas Shulman has stated that the IRS plans to exempt business transactions conducted using debit and credit cards from the new reporting requirement."
If true/accurate, any thoughts? >>
Plus it's only for business to business transactions, right? Are they still saying that?
If a business buys from the public or if the public buys from a dealer, they are both example of exempt transactions?
- Ian >>
No. Public buys from dealer = no reporting. Dealer buys from public = report required.
An authorized PCGS dealer, and a contributor to the Red Book.
I have zero interest in selling and receiving another card. The illegals don't do that, I won't either.
<< <i>(Re the OP's question): It is all well and good if we as a coin shop use the company credit card to buy gift boxes and such from our wholoesale supplier, but if you as a collector come in to sell us coins or bullion, how can I pay you with the company credit card? You don't take credit cards.
TD
(Edited for clarity) >>
The same way that I would pay you with my CC using those promotional checks that one sometimes gets in the mail that are essentially a cash advance against your CC. Perhaps you could work out a deal with your CC company to get a fistful of those with minimum or no cash advance fees to you. Then again since I am not a business, you wouldn't be issuing any 1099s to me.
<< <i>If the Republicrats take control of the house and senate all the discussion may be muted by the repeal of the Health Care Initiative that brought this ridiculous law into being in the first place. >>
They will not have enough votes to overide a veto from the Messiah, however Congress will not fund the IRS with money to fund all of the new hires that will be required to keep track. We will need another two years to vote again to get enough non-progressives in there to take back the Country and reverse all of the damage that has been done.
IMHO, of course.......
<< <i>Doing a search on the forum does NOT produce a link to the actual law verbage. Does anyone have this? Cheers, RickO >>
I don't have a link handy Rick. But the way the law is written... whenever a business purchases anything that is $600 or greater, then the form needs to be filled out. It does not matter whether the seller is a business or individual. Also, the $600 is a year aggregate, so if a person sells something less than $600, I would think a dealer would still need to get the info just in case the seller would sell something later in the year and the total would then be met.
The IRS is not concerned when credit cards are used, since they can already track that.
The law applies not just for coins... but all buying selling transactions over $600.
<< <i>Doing a search on the forum does NOT produce a link to the actual law verbage. Does anyone have this? Cheers, RickO >>
Google is your friend
A blog... yet it also displays the verbage of the actual law as written... I imagine that with further internet searching, a link to the actual document in it's entirety might be possible. However, from what I have heard, attempting to download such a large document might overload your PC
<< <i>If the Republicrats take control of the house and senate all the discussion may be muted by the repeal of the Health Care Initiative that brought this ridiculous law into being in the first place. >>
If we bring politics into the discussion the discussion may be muted by our host.
Government is the great fiction through which everybody endeavors to live at the expense of everybody else. - Bastiat
<< <i>If the Republicrats take control of the house and senate all the discussion may be muted by the repeal of the Health Care Initiative that brought this ridiculous law into being in the first place. >>
I believe you are trying to use the word "mooted."
<< <i>. . . . . Then again since I am not a business, you wouldn't be issuing any 1099s to me. >>
No. If I buy over $600 from you, whether you are a person, corporation, or whatever, and I don't use a credit card, I will have to issue a 1099 to you.
An authorized PCGS dealer, and a contributor to the Red Book.
<< <i>
<< <i>. . . . . Then again since I am not a business, you wouldn't be issuing any 1099s to me. >>
No. If I buy over $600 from you, whether you are a person, corporation, or whatever, and I don't use a credit card, I will have to issue a 1099 to you. >>
When did that change? Or were folks misinformed to start with?
<< <i>For those who might not have caught this, the following appeared in the 9/20/2010 issue of Coin World (page 10):
"In an Aug. 30 e-mail to a constituent, Sen. Ben Nelson (Neb.), indicated that IRS Commissioner Douglas Shulman has stated that the IRS plans to exempt business transactions conducted using debit and credit cards from the new reporting requirement."
If true/accurate, any thoughts? >>
LOL well of course . There slowly squeezing out "cash"
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MACAU
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EMERGING MARKET GROUP
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Owner/Founder GreatCollections
GreatCollections Coin Auctions - Certified Coin Auctions Every Week - Rare Coins & Coin Values
So what if the public buys/sells from the public (ie no businesses involved, but private individuals) ?
roadrunner
<< <i>No. Public buys from dealer = no reporting. Dealer buys from public = report required.
So what if the public buys/sells from the public (ie no businesses involved, but private individuals) ?
roadrunner >>
Good question. This is exactly why the law needs to be changed. (plus, I am sure I read something official stating it's business to business only - but there are many different interpretations of the language).
- Ian
Owner/Founder GreatCollections
GreatCollections Coin Auctions - Certified Coin Auctions Every Week - Rare Coins & Coin Values
We CPA's keep saying that if dealers buy from individuals who are not businesses then such transaction will not require a 1099 form under the new law as this does not constitute business to business transaction.
However, dealers do not know if the person they are buying from is a dealer/business or an individual collector/non-business. Just because the collector says he is a collector does not constitute proof and thusly dealers need to err on the side of caution to issue 1099's anyway to be on the safe side.
<< <i>Is this from the bill nobody read?
Yep.... the one that we needed to vote on so we could see what was in it.
However, dealers do not know if the person they are buying from is a dealer/business or an individual collector/non-business. Just because the collector says he is a collector does not constitute proof and thusly dealers need to err on the side of caution to issue 1099's anyway to be on the safe side.
Then a collector can bring with them a copy of their tax return and show that they are not filing a schedule C business addendum. Would be pretty simple imo. If such a person did previously operate a schedule C business they can show paperwork showing that the business was terminated (state sales tax reuse permit turned in, etc.).
roadrunner
If collecting coins requires me to have my tax return with me at all times to FAX to dealers and other collectors and hand over to dealers at shows as proof that I am a collector, I think it is time to find another hobby.
edited for clarity
The question re a coin trader(s) is whether such individual(s) do this in their regular course of business, or are hobbyists.
"Seu cabra da peste,
"Sou Mangueira......."
For those involved in a trade or business (i.e., coin dealers) will have to file a report on any person, or corporation (except tax-exempt corporations) to whom the dealer pays $600 or more in any calendar year.
So what I said earlier, "If I buy over $600 from you, whether you are a person, corporation, or whatever, and I don't use a credit card, I will have to issue a 1099 to you.", appears to be accurate based on Frank's document.
An authorized PCGS dealer, and a contributor to the Red Book.
TD