New Rules: You And The IRS This January
Tuesday, December 7, 2010
The new ObamaCare1099 rule for reporting of all cash, credit and check business transactions of $600 or more is scheduled to begin January of 2012. This is really an extension of the 2008 Housing and Recovery Act IRS rules that start this January when merchant banks and PayPal will report business sales directly to the IRS (the reporting threshold is $20,000 and 200 transactions a year).
These new IRS rules will affect every American:
• Income tax collection could rise as much as $345 billion a year
• Small businesses will be crushed and unemployment will rise
• A cashless economy is further set in motion
• IRS snooping and audits will increase
• Gold can be tracked
• Identity theft is a risk
• Government surveillance will increase
THE TAX GAP
ObamaCare requires that businesses and self-employed individuals submit 1099 forms to the IRS for all business purchases of $600 or more. The stated purpose for this is to close the ‘tax gap’ which is the difference between the amount of what is “owed” and what is paid, due to lack of reporting and under-reporting, and is estimated at $300 billion dollars a year. Last week, the Senate failed to repeal the ObamaCare 1099 rule because they could not agree on how to make up the “lost” revenue that would be generated from strict reporting, which they estimated to be $19 billion over 10 years, which is a GROSS underestimate.