If you’ve not heard of this particular function of the new health care bill, then here’s another update (oh, and it has precisely nothing to do with health care, in case you are wondering):
Tucked into the nation’s massive new health care law is a requirement that could become a paperwork nightmare for nearly 40 million businesses.
The rule: They must file tax forms for every vendor that sells them more than $600 in goods.
The goal is to prevent vendors from underreporting their income to the Internal Revenue Service. The government must think vendors are omitting a lot, because the filing requirement is estimated to bring in $19 billion over the next decade.
Business groups say it will swamp their members in paperwork, and Congress is listening. Democrats and Republicans want to repeal it, but getting them to work together on the issue is proving difficult in an election year.
It would be nice to talk about how we could do away with the whole 1099 issue (for everyone) were we to go with a consumption tax rather than an income tax, but the IRS has heavily vested interest in ensuring that the current tax law/code complexity is never reduced. Why, it might put somebody out of work–and we can’t have that, can we?