Costly 1099 Mandate
Buried deep within the recent healthcare bill is a mandate that will force millions of businesses to issue hundreds of millions, perhaps billions, of additional IRS Form 1099s every year. It appears to be a costly, anti-business nightmare.
In a recent summary, tax information firm RIA notes the types of transactions covered by the new 1099 rules:
The 2010 Health Care Act adds “amounts in consideration for property” (Code Sec. 6041(a) as amended by 2010 Health Care Act §9006(b)(1)) and “gross proceeds” (Code Sec. 6041(a) as amended by 2010 Health Care Act §9006(b)(2)) to the pre-2010 Health Care Act categories of payments for which an information return to IRS will be required if the $600 aggregate payment threshold is met in a tax year for any one payee. Thus, Congress says that for payments made after 2011, the term “payments” includes gross proceeds paid in consideration for property or services.
How is the IRS going to deal with untold billions of 1099s? Also now almost every transaction will require a 1099 with you SS# or Tax ID# on them. This is going to make ID theft much easier.
