Beginning January 1, 2012, you will be required to report just about everything to the IRS. There has been some discussion recently about this in relation to gold, but it applies to everything if you purchase in aggregate over $600. In other words purchases that add up to more than $600 over the course of a year require IRS form 1099 to be filed. It applies to “all persons engaged in business.” Clean someone’s house? Mow a lawn? Write an article? Write a program? Graphic design? Realtor?
So if a person buys a computer on January 1st for $399, paper and ink and printer for more than $202 on December 31st of that year from the same person or business (flea market, Bill’s Computer Condo, Office Depot) for their office, they are required to file IRS Form 1099. Forgot about it over the course of the year? Too bad, you are breaking the law.
If a business or individual pays you more than $600 in a YEAR to clean their offices, they’ll be required to 1099 you. Buy more than $600 in goods from the grocery store in a year for your business? Form 1099. Think about it, do you buy bottles of water or soda or snacks to give out to clients or employees?
Are you a freelance writer or designer? A Doctor or lawyer? Buy a a 3G iPad? You will be required to send a 1099 to Apple (all the 3Gs are over $600). But a Wifi iPad and some songs and apps from Apple iTunes/App Store? Form 1099. Realtor? Your MLS fee’s over $600? 1099. Fish tank in your orthodontic office (our’s does)? 1099 to the maintenance company. Buy a new desk and chair? 1099. How many people and companies do you have to track? Will you just consolidate to a few large ones to avoid the paperwork? So long to a bunch of small businesses.
Buy Starbucks a few times a week for an employee as a reward? That is about $650 per year if you buy it every other day. You will have to send Starbucks a 1099. If you are paying by credit card, it can be – and will be – tracked.
This isn’t just anti-business. It is anti-freedom. No one who wants to live in a free country wants all their transactions reported to the Federal Government – or to anyone. People say “But I have nothing to hide, so what is the big deal?” Okay, we’ll be over to install a camera in your bedroom – if you aren’t a pedophile, you have nothing to hide, right? I’d also like copies of your bank accounts and credit card statements. This is not about “I have nothing to hide,” it is about freedom. Even ignoring how outrageous this concept is and the Constitutionality of it, the fact that in a free country anyone would put up with transaction monitoring at all, let alone this intrusively says a lot about the goals of the people who are advocating it. It is about control and power over you and the country. Sure, it starts out as for a “good cause”(tm), but ends up consolidating power and control in a small group of people who want nothing more than the power of life and death over every aspect of the country.
The next will be: “this is a tremendous burden on people and businesses, so we will just have the credit card companies automatically add up the totals for you and submit them to the IRS electronically. And as long as we are doing that, why not track everything since those purchases under $600 per year ‘lost revenue.'”
It is totalitarianism, all in the name of a “good cause.” It turns us into a nation of snitches – you better file your 1099 because the person on the other end of the transaction will be doing so. There was a lot of complaining about the Patriot Act monitoring people, but this makes the Patriot Act look like a puddle next to the Pacific.
Here is the language, amendments are in italics and highlighted.
TITLE 26 > Subtitle F > CHAPTER 61 > Subchapter A > PART III > Subpart B > § 6041. Information at source(a) Payments of $600 or moreAll 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), of $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.…(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.