Protest New Hidden 1099 Reporting Requirements

by liana on August 31, 2010

Attention ALL small business owners!

Our government, in attempt to conjure up more money to fund their expensive Health Care bill, has slipped a small line into this bill REQUIRING A MAJOR CHANGE in SMALL BUSINESS REPORTING starting next year.  This change is going to mean small businesses like myself — other photographers and entrepreneurs will have the added burden of massive amounts of additional tax filing requirements.

They are asking something nearly impossible – to send a 1099 to EVERY vendor (including corporations and larger companies like if we buy products from Office Depot, B&H, Apple Computer, etc) that we spend more than $600 with.  So if you buy a computer from Apple for $2000 you have to send them a 1099.  If you spend $620 at Walmart buying office supplies in any give year, you have to send them a 1099!  This is ludicrous!

If you are like me you have dozens, sometimes hundreds of suppliers.  Imagine the cost and time involved in sending 1099s to everyone!  Currently this is only required if we spend money on independent contractors providing services to our business (not corporations).  If you thought keeping up with your books and accounting is difficult now, just imagine the horror it will be next year if this bill is not corrected.

The government is accepting feedback currently and ASMP has drafted a letter that proposes a better compromise to this change.  PLEASE write and let them know it is unacceptable to pass this as-is!

Here’s the ASMP email letter you may send:


(SAMPLE EMAIL)

TO: Notice.comments@irscounsel.treas.gov

RE: Notice 2010-51

Dear Sir or Madam:

I am a professional photographer and a small business person. I have virtually no administrative staff to handle my record-keeping and reporting responsibilities. The new requirement under Section 6041 of the Internal Revenue Code would place impossible burdens on me. The exemption for credit card transactions was a great step toward reducing the impact of this change in the tax code. Unfortunately, it does not go far enough.

I often pay for computer and camera equipment, studio and equipment rentals, catering services, and other items by check or cash. Those expenditures often total more than $600 per vendor in any given year. Having to keep separate track of each of these items — and then to issue Form 1099’s to each vendor — would simply take more time than I have as the owner of a very small business operation, and it would require back office support that I do not have and cannot afford.

Please change the requirements so that they apply only to larger business entities, such as persons or entities that employ more than 25 people.

Thank you for your time and understanding.

{ 11 comments… read them below or add one }

Alan Darmody August 31, 2010 at 11:51 AM

Thanks for the heads up. I just sent them an email. I will pray that someone logical will receive it and make a decision to not move forward with this.

Stephen August 31, 2010 at 12:03 PM

wow–synchronicity at work–just left my CPA’s office where he filled me in on this very issue–we all need to be sending in notes –will pass this on too–thanks for posting

Lydia August 31, 2010 at 1:10 PM

Done! Thanks for the heads up!

Rylee August 31, 2010 at 1:13 PM

Thanks for letting everyone know about this! I have sent a letter and I’ll pass this on to all the small business owner’s I know.

Laura Randall August 31, 2010 at 1:40 PM

I’m happy to see you spreading the word about this ridiculousness and appreciate you sharing the email address of where to send letters. I added on the following to my email (just because yours was a little nicer than how I’m feeling about it! LOL!!)

“In a flailing economy the American government (including the IRS) needs to do whatever it can to assist small businesses, not burden them with more taxes and unnecessary paperwork which will just distract them from doing business to help rebuild our economy. Please remove this requirement so that you do not kill off more small businesses in our country. ”

I can only imagine how many more “jobs” will be “created or saved” because the IRS will obviously have to hire MANY more people in order to deal with the additional paperwork and tracking everything. This will look good politically to some people, but ultimately it could potentially put more small businesses out in the cold, especially if they start getting hefty fines because someone in the IRS finds that a 1099 wasn’t filed properly. What a nightmare!! The last thing our country needs to do is create an even more bloated IRS and a government whose culture is one of “we are watching you”. Geez!

liana August 31, 2010 at 1:43 PM

Laura – LOVE your response even more than the standard ASMP form response!! Thanks for sharing.

Sarah Danaher August 31, 2010 at 1:59 PM

Thanks SOOOOOOOO much for posting this!!

Rupa September 1, 2010 at 11:42 PM

Thanks for posting — this is crazy and I love Laura’s add to it — might just borrow a bit of it as well!! : )

Crystal Collua September 7, 2010 at 9:36 PM

Crazy, crazy, crazy!! Will send letter asap! Thanks for sharing N!

Melissa Abbey September 7, 2010 at 9:40 PM

Thanks for sharing…not happy 🙁

Paul mcnerney September 7, 2010 at 9:52 PM

Hmmm, do you think apple or walmart will actually keep/file these pesky little 1099s from small entities. Not only our bookkeeping is affected! …….. One million 1099s filed with apple will make some serious noise!

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