
Buried in the ObamaCare 2000+ page law was a provision that basically makes all people in the nation part of a huge double entry accounting system so that the IRS can verify that everybody reports what they sell because you have reported what you bought.
Right now, if I hire a non-corporation for a service, and the service costs more than $600, I have to file a 1099 reporting the transaction. The law expands that requirement to corporations and requires me to report for every PRODUCT that purchase from a vendor where the total purchases for the year from that vendor exceed $600.
So… if I eat at Applebees, and Famous Daves, both owned by the same company, and spend more than $600 dollars there in a year, I have to report it.
Or if I go on a road trip to sell my software and stay in five Choice hotel chains for, say $120 a night.
Or virtually any air travel. Oh.. and the rental car.
And any computer I buy.
I file one with the IRS and I have to know where to send other copy for each vendor I buy more than $600 stuff from.
My company files, currently, maybe ten 1099′s a year. For services like technical writing, janitorial service, that sort of thing. If they aren’t a corporation. Under the new system, off hand, I’d say I’ll have to consolidate and file perhaps 100. And these 100 are a LOT harder than the janitor we see every week, or the tech writer I conference call. This is A HUGE increase in work, basically because the Government has now impressed my company into their new national double entry accounting system.
This is so stupid. Why would they do it? Because they want money. As tax rates rise, compliance drops. As compliance drops, the force used by the IRS rises. It is a nasty game, and we have to break ourselves of it.
Set taxes at fair, low, levels. Probably half, at least, what they are now. Have whatever government that funds – and make it do less, but do what it does well.