Dan Danner of The Wall Street Journal takes on the 1099 mandate in a recent opinion piece:
Adding insult to injury, the law also requires all businesses to issue IRS 1099 forms to document every business-to-business transaction of $600 or more. To someone who’s never run a business, this may sound like nothing. But Congress hopes to raise $17 billion in added tax revenues and fees from this new mandate. That’s hardly nothing.
The burden of raising that expected revenue falls again on the backs of small business owners who already suffer under unmanageable federal paperwork burdens. What’s worse, this new reporting requirement has absolutely nothing to do with health-care reform. It was included to help pay for the nearly trillion-dollar price tag of the bill. Why should small business owners have to pay for a bill that causes them so much harm? They shouldn’t, which is why NFIB is fighting against this law in court.
Update: Previous posts on the new 1099 mandate are available here.
Hans
Hans Schantz is CTO of The Q-Track Corporation, and a co-inventor of NFER® technology. His prior work experience includes stints with IBM, the Lawrence Livermore National Lab, The ElectroScience Lab of the Ohio State University, and Time Domain Corporation. Author of The Art and Science of Ultra-wideband Antennas (Artech House, 2005), his thirty-five U.S. patents include antennas, RF systems, RF-based location systems, and related inventions. He is a Senior Member of the IEEE, and an amateur radio operator [KC5VLD]. Schantz earned his Ph.D. in physics from the University of Texas at Austin. He also holds degrees in Industrial Engineering and Physics from Purdue University. Dr. Schantz blogs at ÆtherCzar and is @ÆtherCzar on Twitter. His wife, Barbara, invented The Baby Dipper® Bowl. Hans and Barbara have two sets of twins: girls aged seven, and boys three years old. The views expressed are the author's and are not necessarily the views of his employer, clients, investors, sponsors, or customers.
All this for another $17 billion? Sadly, that now a drop in the bucket in terms of deficit reduction.
Has anyone estimated the total compliance cost for all businesses to implement this mandate? Keep in mind, this applies to most consultants and independent contractors as well. Between analyzing pretty much every business transaction, requesting and filling out W-9 forms from everyone a company does business with, and then filing a stack of 1099s, I suspect that compliance cost may exceed the new revenue they hope to raise.