Economics Questions

Re: Have you guys seen this? (IRS tracking PM purchases)

TheNcredibleEgg — Sun, 18 Jul 2010 08:19:47 GMT

"I don't quite get where the $600 dollar amount is coming from? The reporting requirement is in place, but not a monetary amount."

I found this reference which seems to explain it: Section 9006 of the bill amends Section 6041 of the Internal Revenue Code. Combined, the relevant edits produce:

(a) Payments of $600 or more

All persons engaged in a trade or business and making payment in the course of such trade or business to another person, of rent, salaries, wages, amounts in consideration for property, premiums, annuities, compensations, remunerations, emoluments, or other gross proceeds, fixed or determinable gains, profits, and income (other than payments to which section 6042(a)(1),6044(a)(1), 6047(e), 6049(a), or 6050N(a) applies, and other than payments with respect to which a statement is required under the authority of section 6042(a)(2), 6044(a)(2), or 6045), or $600 or more in any taxable year, or, in the case of such payments made by the United States, the officers or employees of the United States having information as to such payments and required to make returns in regard thereto by the regulations hereinafter provided for,shall render a true and accurate return to the Secretary, under such regulations and in such form and manner and to such extent as may be prescribed by the Secretary, setting forth the amount of such gross proceeds, gains, profits, and income, and the name and address of the recipient of such payment.

What does this mean for your business?

Normally, you would tally up receipts for your payments to your vendors and include them in the relevant sections of your tax return as business expenses. Now, with these changes, you will have to issue a 1099 to each vendor, whether individual or corporation, from whom you purchased over $600 of goods or services during the fiscal year and send a copy of that 1099 to the IRS. This is in addition to the 1099s you had to issue previously.

You’ll also be receiving a 1099 from each business to which you sold over $600 of goods or services. Each new 1099 will need to be reported on your tax return at the end of the year.

The buzz on the internet is that this will create mounds of unnecessary paperwork for small businesses across the country. It is true that the number of 1099s will increase significantly, however, I see two positive implications of these changes. First, it will force business owners to keep better records, report income more accurately, and pay the proper amount of taxes. Second, will also cut back on fraudulent business deductions, which will ease the burden on the IRS to catch tax cheats and, hopefully, save the rest of us honest taxpayers the hassles associated with overbearing IRS scrutiny. The work involved in issuing 1099s to your vendors and processing the 1099s you receive will not be overbearing. Think of it as high school math class – you don’t get an A without showing your work.

Re: Have you guys seen this? (IRS tracking PM purchases)

ViennaSausage — Sun, 18 Jul 2010 06:19:45 GMT

I don't quite get where the $600 dollar amount is coming from? The reporting requirement is in place, but not a monetary amount.

If we look at the section in the Patient Protection and Affordable Care Act that is referenced in HR 5141, it reads:

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--

Re: Have you guys seen this? (IRS tracking PM purchases)

BrianAnderson — Sun, 18 Jul 2010 05:32:54 GMT

That is maddening. I'll see if I can write about this for my column next week. I'm sure my editor won't care.

Anyone else see Executive Order 6102 coming back from the grave to haunt us?

Re: Have you guys seen this? (IRS tracking PM purchases)

Clayton — Sun, 18 Jul 2010 05:16:38 GMT

1 oz. gold = $1200*

PLUS

Obamacare $600 reporting requirement

PLUS

Craigslist

EQUALS

gold bullion coin black market!! :-D

Clayton -

*Will likely be much higher by Jan. 1, 2012

Re: Have you guys seen this? (IRS tracking PM purchases)

Andy — Sat, 17 Jul 2010 20:52:43 GMT

In the new health care bill:

http://www.thedailycrux.com/content/5209/Precious_Metals

I shouldn't be suprised, but how could any sentient human being see this and not be persuaded that we are on the verge of totalitarianism? It's maddening.

It's not happening, It's not happening, It's not happening,

Is what they say,

My life hasn't changed My life hasn't changed,

Is the masses way.

Re: Have you guys seen this? (IRS tracking PM purchases)

scineram — Sat, 17 Jul 2010 18:41:15 GMT

Caley McKibbin:

How can you be required to report that to the IRS when you are not required to report anything to the IRS in the first place

What do you mean you are not?

Re: Have you guys seen this? (IRS tracking PM purchases)

Caley McKibbin — Sat, 17 Jul 2010 18:26:17 GMT

How can you be required to report that to the IRS when you are not required to report anything to the IRS in the first place?

Re: Have you guys seen this? (IRS tracking PM purchases)

mahsah — Sat, 17 Jul 2010 18:06:45 GMT

I've seen it, and I think that the "Gold Bugs" are underestimating the threat of this provison -- it applies to ALL purchases over 600 bucks, not just precious metals.

Its a small business killer.

Have you guys seen this? (IRS tracking PM purchases)

Lewis S. — Sat, 17 Jul 2010 14:26:33 GMT

In the new health care bill:

http://www.thedailycrux.com/content/5209/Precious_Metals

I shouldn't be suprised, but how could any sentient human being see this and not be persuaded that we are on the verge of totalitarianism? It's maddening.