Not Good News on 1099 Repeal

Coinosaurus · February 16, 2011 3:35AM

More Washington bureaucracy in the way.......link.

derryb · February 16, 2011 3:43AM

So, Congress is concerned about the loss of revenue from the 1099 change. This is not new revenue, this is revenue they are currently not collecting from taxpayers who do not report income.

I have a way to fix this without the new 1099: Have the IRS do their job and go out and catch the tax cheats. Or, better yet, take the estimated loss of revenue from the IRS's budget. All the new 1099 law does is have buyers report the income of the people they buy from. A real paperwork burden, at some expense, to people who are mostly paying their fair share of taxes.

ricko · February 16, 2011 4:46AM

This is an idiotic attempt to broaden bureaucracy and hamstring the small businesses (the backbone of our economy) even more. If they really wanted to eliminate it, Obama could do so by Presidential edict. Cheers, RickO

Bankerbob56 · February 16, 2011 5:36AM

hammered54 · February 16, 2011 5:44AM

"someone" will be here soon to explain it to us.

PerryHall · February 16, 2011 5:51AM

<< "someone" will be here soon to explain it to us. >>

Agree. Where's Frank when you need him?

Frankcoins · February 16, 2011 6:22AM

<< 

<< "someone" will be here soon to explain it to us. >>

Agree. Where's Frank when you need him?

>>

If collecting $20 billion lost to tax evasion is undone, it's a $20 billion increase in the deficit. Under
the PAYGO law that was in effect from 1990 until 2002, and reinstated in 2010, the money has to be cut
somewhere else or taxes raised so there is no increase in the deficit. The Republicans blocked a plan
last year to cancel the 1099 changes and collect the money from US companies that relocate offshore
to avoid US taxes. The president cannot override budget legislation, congress has to do it.

roadrunner · February 16, 2011 6:37AM

It's a leap of faith whether that program would bring in any net income, let alone $20 BILL. If they are so worried about the "lost" revenue, I suggest the entire federal govt taking off 1 non-paid day per year. That would generate $2 BILL each year.

rodarunner

ziggy29 · February 16, 2011 6:39AM

<< It's a leap of faith whether that program would bring in any net income, let alone $20 BILL. >>

It would almost certainly bring in something. The bigger problem here is the economic cost of compliance and the extra work involved in accounting for these many millions of 1099s that might be generated. It wouldn't surprise me if the added cost of compliance, accounting and paper shuffling turns out to be more than the additional tax revenue it raises. In other words, it's not just a "$20 billion tax", it's a $20 billion tax PLUS an unknown number of billions in extra accounting and compliance costs.

RedneckHB · February 16, 2011 9:25AM

<< It's a leap of faith whether that program would bring in any net income, let alone $20 BILL. If they are so worried about the "lost" revenue, I suggest the entire federal govt taking off 1 non-paid day per year. That would generate $2 BILL each year.

rodarunner >>

I'd tell them to take a whole year off. Whould anyone notice?

drwstr123 · February 16, 2011 9:41AM

<< 

<< It's a leap of faith whether that program would bring in any net income, let alone $20 BILL. If they are so worried about the "lost" revenue, I suggest the entire federal govt taking off 1 non-paid day per year. That would generate $2 BILL each year.

rodarunner >>

I'd tell them to take a whole year off. Whould anyone notice? >>

Yes, the improvement would be blatant.

taxmad · February 16, 2011 9:41AM

The people that need to worry about an audit (not the results of the audit, just being audited) are companies that deal in high dollar/low margin industries. Since they will compare gross income through 1099's with net income, they will focus on these industries until they are comfortable that a particular industry is a dry well.

hammered54 · February 16, 2011 9:49AM

they would have all the tax revenue they need if they would just get off the neck of the working man and do something to help the 9.5 percent unemployment...........to start.

Elcontador · February 16, 2011 10:25AM

The whole loss of revenue argument is intellectually dishonest. No, excuse me, it's a flat out lie, and anyone who doesn't understand this shouldn't be in a position to make such laws in the first place. It's just like every year they project additional revenue to the Treasury from not adjusting the alternative minimum tax exemption upward, and every year, they make this upward adjustment.

Please tell me how the IRS will get one nickel from my sending Staples a 1099 for the amount of money I spend there for office supplies? This is what will generate 90% plus of the new 1099s under the new law. You could argue that they can get additional revenue by more aggressively pursuing fining entities which don't issue them, but even if you go there, that will not offset the additional benefit packages of hiring these 5,000 new Revenue Agents.

Do you really think for one minute that this new law will get people / entities who at present do not file 1099s to start doing so? If so, please sign up for a hunting trip I am guiding in Sonora, Mexico, to look for chupacabras.

Raufus · February 16, 2011 11:12AM

<< More Washington bureaucracy in the way.......link. >>

It never ceases to amaze me how the #$*$*&$ in Washington talk about how allowing me to keep a few more dollars of MY very hard earned money somehow "costs" the Treasury. Heading even faster into the socialist abyss...

Raufus · February 16, 2011 11:13AM

<< 

<< 

<< It's a leap of faith whether that program would bring in any net income, let alone $20 BILL. If they are so worried about the "lost" revenue, I suggest the entire federal govt taking off 1 non-paid day per year. That would generate $2 BILL each year.

rodarunner >>

I'd tell them to take a whole year off. Whould anyone notice? >>

Yes, the improvement would be blatant. >>

pendragon1998 · February 16, 2011 11:30AM

shottaker · February 16, 2011 2:12PM

<< 
I have a way to fix this without the new 1099: Have the IRS do their job and go out and catch the tax cheats. >>

Cute personal experience story. This is true and very personal. 2007 was tremendous. The IRS gets a check from me that had lots of numbers. It was really a great year. I get audited. The full enema pain in the a audit with all the requisite loss of sleep. Lots of threats from a newly graduated IRS agent. End result I am cleared after losing a few years from my alloted lifespan.
Next year we get hammered with a huge loss in the summer of 08. We buy a tremendous amount of bullion late on a friday and before locking anything in all of the fund managers dump all the silver and gold paper they have to raise cash (thanks goldman sachs and crew for doing that weeks before letting john q public know youre in trouble). Monday morning im looking at a pretty hefty loss. A lot of unusual business expenses and a large theft makes the year pretty nasty. I declare a pitiful personal income for the year and pay a fraction of 07 taxes (not even worthy of saying a fraction). Heck I paid power bills larger than that thing ! NO AUDIT.........

The average man would almost think you are punished for reporting your income honestly. You would think they would red flag my 08 taxes in a heartbeat and ensure that my losses were legit (which they were). Instead if you show a spike in income they audit you looking for more.

The truly sad part of the 1099 deal is coin stores will cease to exist. There will only be shows and thats it (since compliance will be harder to enforce with weekend warriors). They dont currently do their job correctly. Instead of looking for patterns where someone might be underreporting they look for someone who paid a ton and figure theyre good for more.

vann · February 16, 2011 2:59PM

Start taxing all the 501c charities which are currently exempt to make up for the lost revenue instead of further regulating small business that is the backbone of the nation. ''Give Unto Caesar What is Caesar's'.

shorecoll · February 16, 2011 9:35PM

They need to audit our local flea market, but I don't think the local IRS office has any people who can speak or read Mandarin.

I live in a town of 30,000 and we got 16 new IRS agents in 2010...so somebody is getting the treatment.

DuCrozat · February 16, 2011 9:48PM

Didn't read the entire thread as a waffling congress bugs me.

In short, these guys blow through 20 billion like it was candy. Curbing waste in spending would easily make this up. At the very least, adding this amount to an already enormous debt is a drop in the bucket.

How much did the "study" that arrived at the random 20 billion amount cost?

This amount is merely an estimate arrived at like all the other fantasy numbers they come up with: out of thin air.

DuCrozat · February 16, 2011 10:05PM

<< Start taxing all the 501c charities which are currently exempt to make up for the lost revenue instead of further regulating small business that is the backbone of the nation. ''Give Unto Caesar What is Caesar's'. >>

501c includes many organizations that help the needy. Churches, civic organizations, etc. These groups have historically contributed more to the well-being of the community than any governmental agency could hope to. And the funds get down to the truly needy in a community much faster.

Greater scrutiny of the 501c's that skirt regulations, like those engaging in political activities (especially "religious" organizations who do so), and ending the tax-exempt status of political lobbying groups would be OK in my book.

Those who give to charitable organizations still get to follow the "Giving unto Caesar, what is Caesar's" privilege based on what they have left.

BillJones · February 16, 2011 10:51PM

Lost in the arguments is that the IRS is going to have process this cascade of information in order to use it. Then they are going to have act on the unreported revenue that the IRS believes exists. All of this will come at a cost which will offset a good part of the additional revenue the IRS might collect.

But of course this will result in the hiring of more government workers; government will get bigger; and that in the end is what many politicians in Washington want anyway. For them bigger government is the goal, not good public policy.

shorecoll · February 16, 2011 11:50PM

In general I support 501c non-profits, however...one of the reasons Harrisburg, PA almost filed bankruptcy last year is that 501c firms own more than 50% of the property in the city so there's no tax base. There has to be some logic to this.

lkeigwin · February 17, 2011 12:03AM

The 1099 law doesn't go far enough, if the gov't really wants to tax law compliance.

Every transaction no matter how small ought to have a 1099. Both buyer and seller should report every transaction. Cash payments of any kind should require signatures and digital photos or fingerprints of both parties.

Sellers should also be required to report inquiries. The gov't should know what you're thinking of buying to get the clearest sense of your true income and spending habits.
Lance.

maibockaddict · February 17, 2011 12:38AM

the whole health care law was declared unconstitutional! Only if the Supreme Court overturns the ruling, with this 1099 thing matter.

Don't you guys watch the news?

hammered54 · February 17, 2011 12:43AM

<< The 1099 law doesn't go far enough, if the gov't really wants to tax law compliance.

Every transaction no matter how small ought to have a 1099. Both buyer and seller should report every transaction. Cash payments of any kind should require signatures and digital photos or fingerprints of both parties.

Sellers should also be required to report inquiries. The gov't should know what you're thinking of buying to get the clearest sense of your true income and spending habits.
Lance. >>

been hanging with Frank ?

BillJones · February 17, 2011 12:49AM

<< the whole health care law was declared unconstitutional! Only if the Supreme Court overturns the ruling, with this 1099 thing matter.

Don't you guys watch the news? >>

The lower court rulings don't mean anything until the Supreme Court weighs in on the matter because the Obama Administration is totally ignoring the lower court rulings. The vote the Supreme Court will be touch and go because it will depend upon a swing vote by one moderate justice. If one of the conservatives on the Supreme Court should die or leave before the matter reaches them Obama will appoint another “progressive” and the health care law will stand.

maibockaddict · February 17, 2011 12:53AM

<< 

<< the whole health care law was declared unconstitutional! Only if the Supreme Court overturns the ruling, with this 1099 thing matter.

Don't you guys watch the news? >>

The lower court rulings don't mean anything until the Supreme Court weighs in on the matter because the Obama Administration is totally ignoring the lower court rulings. The vote the Supreme Court will be touch and go because it will depend upon a swing vote by one moderate justice. If one of the conservatives on the Supreme Court should die or leave before the matter reaches them Obama will appoint another “progressive” and the health care law will stand. >>

Obama is in contempt of court right now by implementing an unconstitutional law. The judges ruling strikes the law down, and Obama must go through proper legal proceedings to have the Judges ruling changed, which is to bring the case before the supreme court. Obama should be impeached for this, as this is the second time he is in contempt (the drilling ban is the other)

DrBuster · February 17, 2011 12:54AM

When the congress and white house don't play by the law they just redefine sedition.

When they redefine sedition, I redefine my black market.

BillJones · February 17, 2011 2:02AM

I thought that the Senate voted to replea this law a few days ago. There were 17 holder-outs which included the "usual suspects." It still had to go to the House, where one would think it would have an excellent chance of passing.

ziggy29 · February 17, 2011 2:05AM

The hatred for this provision is strongly bipartisan. Unfortunately, a decision on how to pay for its repeal is not.

vann · February 17, 2011 2:20AM

Most of the larger 501c organizations have well paid executives with salaries in excess of 250K from the contributions they receive. Yet, when it comes to taxes they get a free ride. Even a discounted tax rate of a few percent and greater scrutiny of 501c status will go a long way towards raising the needed tax revenue with far less collection expense for the government than enforcing the proposed new regulations. New regulations only further disadvantage small business since they are the ones that can least afford the added compliance costs in comparison to large corporations.

DuCrozat · February 17, 2011 3:26AM

<< Most of the larger 501c organizations have well paid executives with salaries in excess of 250K from the contributions they receive. Yet, when it comes to taxes they get a free ride. Even a discounted tax rate of a few percent and greater scrutiny of 501c status will go a long way towards raising the needed tax revenue with far less collection expense for the government than enforcing the proposed new regulations. New regulations only further disadvantage small business since they are the ones that can least afford the added compliance costs in comparison to large corporations. >>

DuCrozat · February 17, 2011 3:33AM

<< 

<< Most of the larger 501c organizations have well paid executives with salaries in excess of 250K from the contributions they receive. Yet, when it comes to taxes they get a free ride. Even a discounted tax rate of a few percent and greater scrutiny of 501c status will go a long way towards raising the needed tax revenue with far less collection expense for the government than enforcing the proposed new regulations. New regulations only further disadvantage small business since they are the ones that can least afford the added compliance costs in comparison to large corporations. >>

>>

I agree about the execs AND include the money mongering tele-preachers in this. There ought to be a limit on how much a percentage of contributions can be spent on salaries, especially when it is for an individual.

Some 501c's give back more than their share in community help while others just take and take.

tyler267 · February 17, 2011 5:56AM

I'm not so sure the Treasury would incur much in the way of the additional costs for 1099 complaince. They would handle it pretty much the way they do now. The real cost would be to the small business owners, including coin dealers, that would have pay to comply.

I think the IRS would probably mandate electronic filing of the 1099s. Then have the computer total the amounts by taxpayer, then compare the total from the 1099s to each taxpayers Income tax return, if the 1099 amounts are not reported on the Income tax return they will calculate how much is owed in taxes and send a bill. Computer would do most of the work.

So if a collector sold some coins and got a 1099 and did not include it on their Income tax return they would get a computer generated tax bill using the gross sales price without regard to cost and expenses to calculate the taxes due. But if the sale was included on the Income tax return, there should not be a problem.

Not Good News on 1099 Repeal

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