Yet another tax cut what-if calculator
Where there's a will, there probably also should be a lawyer involved

Tell the IRS what you think about the new Form 1099 reporting requirement

Hey! Don't go overboard with that headline instruction! There's no need to make lewd recommendations as to what the IRS can do with the added Form 1099s it will start collecting from businesses in 2012.

The tax agency didn't come up with the idea; Congress did.

But just in case Congress doesn't repeal this requirement -- it tried to do that, sort of, this summer -- before it takes effect, the IRS does want to hear from taxpayers about implementation of the impending law.

In case you need a refresher, as part of the Patient Protection and Affordable Care Act (Public Law 111-148), aka the health care reform law, starting in 2012 companies will be required to file a Form 1099 for payments for goods or services that total more than $600 annually to a single business. Currently, such filings are required, but only for purchase of services, not the purchase of goods.1099-misc-2010

As has been widely reported, and acknowledged by Congress' bumbling repeal efforts so far, everyone has an opinion on the new rule.

Now the IRS wants to get those Form 1099 reactions on the official record. It's now accepting public comments (note the word "public," meaning what you say will be seen by anyone who's interested; I refer you back to my opening paragraph) on the proposed law.

So far, suggested changes to the policy include exempting businesses with receipts of less than $1 million, providing a refundable tax credit to businesses of $1 per filed Form 1099 to help offset the compliance costs and increasing the reporting threshold from $600 to $5,000.

And in conjunction with an earlier expansion of third-party reporting requirements with regard to credit and debit cards, one change already has been made. If a business uses a payment card, that payment will not be included in the $600 payment threshold that would prompt a Form 1099 filing since it will be reported elsewhere.

But the Treasury Department and IRS would like your thoughts on additional circumstances in which duplicative reporting might occur, as well as your thoughts on rules that would prevent such double reporting.

The official IRS Notice 2010-51 also wants "specific comments … regarding the burden associated with implementing the new reporting requirements for different types of taxpayers and businesses." This includes:
  • The appropriate scope of the terms "gross proceeds" and "amounts in consideration for property" in section 6041(a), as amended, and how to interpret these terms in a manner that minimizes the reporting burden and avoids duplicative reporting.
  • Whether or how the expanded reporting requirements should apply to payments between affiliated corporations, such as payments related to intercompany transactions within the same consolidated group.
  • The appropriate time and manner of reporting to the Service, and what, if any, changes to existing practices for Form 1099 information reporting to the Service are needed to minimize burden in compliance with the new reporting requirements.
  • What, if any, changes to Form W-9, Request for Taxpayer Identification Number and Certification, and the existing rules for soliciting taxpayer identification numbers (TINs) are needed to minimize the burden for payors to obtain TINs from payees, what are the privacy concerns with respect to TINs, and what are other concerns regarding identifying payees.
  • How should the backup withholding requirements for missing TINs under the expanded new reporting requirements be administered in order to minimize burden on payors.

Got ideas about these new 1099 reporting issues or anything else related to the proposed new rule? You have until Sept. 29 to make your wishes regarding the 1099 rules known.

The IRS offers you three ways to send your comments:

  1. E-mail Notice.Comments@irscounsel.treas.gov. Include "Notice 2010-51" in the subject line.
  2. Snail mail your recommendations to Internal Revenue Service, CC:PA:LPD:PR ( Notice 2010-51), Room 5203, P.O. Box 7604, Ben Franklin Station, Washington, D.C. 20044.
  3. Hand deliver your suggested changes to CC:PA:LPD:PR (Notice 2010-51), Courier's Desk, Internal Revenue Service, 1111 Constitution Avenue NW, Washington, D.C., between 8 a.m. and 4 p.m., Monday through Friday.

Remember, the deadline is just a few weeks away, so get to composing your thoughts!

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