Discussion:New 1099-misc reqmts - excerpts from a prior discussion

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Discussion Forum Index --> Tax Questions --> New 1099-misc reqmts - excerpts from a prior discussion


Trillium (talk|edits) said:

23 May 2010
This discussion contains excerpts from another discussion that was moved to the Chat Forum (the original, which still exists in its entirety, was moved out of the tax forum because posts about the politics behind the bill overwhelmed the discussion about the impact of the bill on clients and tax professionals). The intent of starting this new discussion is to end up with a useful TAX discussion about this legislative change.


What else is in THE BILL (excerpts from a prior discussion)

TTMM (talk|edits) said:

25 March 2010
Found this real depressing:

HR 3590. SEC. 9006. EXPANSION OF INFORMATION REPORTING REQUIREMENTS.

(a) IN GENERAL.—Section 6041 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsections:
‘‘(h) APPLICATION TO CORPORATIONS.—Notwithstanding any regulation prescribed by the Secretary before the date of the enactment of this subsection, for purposes of this section the term ‘person’ includes any corporation that is not an organization exempt from tax under section 501(a).
‘‘(i) REGULATIONS.—The Secretary may prescribe such regulations and other guidance as may be appropriate or necessary to carry out the purposes of this section, including rules to prevent duplicative reporting of transactions.’’.
(b) PAYMENTS FOR PROPERTY AND OTHER GROSS PROCEEDS.—Subsection (a) of section 6041 of the Internal Revenue Code of 1986 is amended—
(1) by inserting ‘‘amounts in consideration for property,’’ after ‘‘wages,’’,
(2) by inserting ‘‘gross proceeds,’’ after ‘‘emoluments, or other’’, and
(3) by inserting ‘‘gross proceeds,’’ after ‘‘setting forth the amount of such’’.
(c) EFFECTIVE DATE.—The amendments made by this section shall apply to payments made after December 31, 2011.

So I have to send a 1099 to Staples?

AEM CPA (talk|edits) said:

25 March 2010
That is absurd.

Larry0434 (talk|edits) said:

25 March 2010
The IRS has been working to have 1099 issued to Corporate Entities.

AEM CPA (talk|edits) said:

25 March 2010
The cost of compliance...

Waynecpa (talk|edits) said:

25 March 2010
As if we needed more to do in January...

Jerrykern (talk|edits) said:

25 March 2010
Two questions:
  1. Is this HR 3590, that President Obama just signed? and
  2. This seems to indicate that now corporations are in-scope, and that payments for goods are in-scope. Is anything out-of-scope anymore? Does this mean there'll be a 1099 for just about every A/P payment I make now?

TTMM (talk|edits) said:

25 March 2010
Yes, yes, nope and yes. You can also view a CCH Tax Briefing at www.cch.com.

So another example. Lets say I have 10 delivery vans. My drivers stop at the same gas stations over and over through the year. Gas stations aren't owned by Chevron, Mobil, etc. So now you have to determine the name and FEIN of every gas station they use and send them a 1099. So what happens if the station is sold during the year?

What about national companies that are actually franchises? When you buy computer software you are actually leasing the software, does that count as a "amounts in consideration of property"? What about the phone company? I could go on and on.

I really need to get a life.

Tbm103 (talk|edits) said:

25 March 2010
TTMM: How do the employees pay for the gas? Are they using a credit card, check or cash? If cc, the payment go to the credit card company. Who gets the 1099?

Szptax (talk|edits) said:

25 March 2010
EXTRAPOLATE THIS TO...everyone or every entity a business pays gets a 1099, and then "match" the 1096's issued by a business to the reported expenses of the business, and audit those that appear to be outside some "tolerance" range....

MWPXYZ (talk|edits) said:

25 March 2010
With all the new provisions I think the IRS computers may not be functional in 2013.

Laticiaw (talk|edits) said:

25 March 2010
TTMM looking for the CCH tax briefing...could you be a little more precise about that...i have to show this to my employer who insists that person is not a corporation...

CPAdavid (talk|edits) said:

25 March 2010
bottom right on page 7

http://tax.cchgroup.com/Legislation/Final-Healthcare-Reform-03-10.pdf

Trillium (talk|edits) said:


At this point CPAdavid also posted an offsite link to the entire legislative text. That interface was awkward to use IMO, but at the time the text wasn't readily available on Thomas, or on any of the usual Senate/house committee websites. Now that the bill content, summary, etc., are available elsewhere, I'll substitute his link with the one used by TaxAlmanac's main page article on the Act: Senate Finance Committee - the top link goes to the final legislation as signed.

David also made a comment about feeling free to read the entire bill...

Jerrykern (talk|edits) said:

25 March 2010
Also feel free to poke yourself in the eye with a sharp stick, it'll hurt about as much as reading that thing...

Natalie (talk|edits) said:

March 25, 2010
So what is the connection of this section to the health care bill? (I know, there doesn't have to be one.) But, how is the government going to know who should get credits and whether employers have provided insurance to everyone they are required to (does it include part-time employees as well?)? I guess this means the insurance companies are going to have to report how much was paid to them for premiums and how many people were covered, etc. Hmm, sounds like lots more work for tax preparers.

TTMM (talk|edits) said:

25 March 2010
Thanks CPADavid I've been out of the office all day. I originally started looking at the CCH briefing and then went to the entire bill to review the particulars because I couldn't believe it.

Tbm103, does it matter? Unless you are reimbursing the employee aren't you still paying the gas station?

Natalie, if you look at this portion of the bill it is specifically entitled "Revenue Provisions". My gut feeling is that they will increase enforcement on businesses not filing 1099s to pay for the give-aways. In answer to your other question, the employer is required to report the health insurance premium on the employees W-2. The the IRS knows which businesses have "cadillac plans" and should be paying the excise tax.

I think I'll go find the sharp stick now. "

Dennis (talk|edits) said:

25 March 2010
Hey. Stick in the eye is for the "tax preparers". For accountants it's not really a big deal. Decent software prepares vendor reports and by the time this rolls around the software will also generate the 1099. (Although the last time I looked Quickbooks still hadn't gotten around to finding a way to total those reports...♫) And think of all the fun the IRS as going to have processing with nothing to match.

Kevinh5 (talk|edits) said:

25 March 2010
they won't even turn the switch 'on' to try to match for three or four years

JR1 (talk|edits) said:

March 25, 2010
Natalie, there's a provision I thought most folks knew about: every employer will be required to include on the W2 (yeah, lucky us, one more thing to do) the amount of health insurance benefits provided to each employee. And you think getting med ins. info for our S corp owners is tough. Wait. We ARE the cops for this, didn't you know?

Natalie (talk|edits) said:

March 26, 2010
Actually, I wasn't aware of that, JR. I was thinking the reporting would come from the insurance companies because they are the ones who would verify that premiums were actually being paid. Doesn't that make more sense? Employers can be penalized for not providing health insurance, so the motivation is to make it look as if they are. This becomes even more important when the employer credits are considered.

Trillium (talk|edits) said:

24 May 2010
Bump to get this special "excerpt" discussion onto the Tax Forum index.

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