Health Care Bill Section 9006 and Your Small Business-HUGE New Small Biz Expense!)

When Congress passed the Health Care Bill in March, they inserted a seemingly insignificant section that will eventually have sweeping implications. It will increase accountability for the small business taxpayer to keep accurate records and make it more difficult for business to claim improper business expenses to offset revenues during the tax year. What does it say?

Section 9006 of the bill amends Section 6041 of the Internal Revenue Code in the following way:

SEC. 9006. EXPANSION OF INFORMATION REPORTING REQUIREMENTS. (a) IN GENERAL.—Section 6041 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsections: ‘‘(h) APPLICATION TO CORPORATIONS.—Notwithstanding any regulation prescribed by the Secretary before the date of the enactment of this subsection, for purposes of this section the term ‘person’ includes any corporation that is not an organization exempt from tax under section 501(a). ‘‘(i) REGULATIONS.—The Secretary may prescribe such regulations and other guidance as may be appropriate or necessary to carry out the purposes of this section, including rules to prevent duplicative reporting of transactions.’’. (b) PAYMENTS FOR PROPERTY AND OTHER GROSS PROCEEDS.— Subsection (a) of section 6041 of the Internal Revenue Code of 1986 is amended— (1) by inserting ‘‘amounts in consideration for property,’’ after ‘‘wages,’’, (2) by inserting ‘‘gross proceeds,’’ after ‘‘emoluments, or other’’, and (3) by inserting ‘‘gross proceeds,’’ after ‘‘setting forth the amount of such’’. (c) EFFECTIVE DATE.—The amendments made by this section shall apply to payments made after December 31, 2011.

All persons engaged in a trade or business and making payment in the course of such trade or business to another person, of rent, salaries, wages, premiums, annuities, compensations, remunerations, emoluments, or other fixed or determinable gains, profits, and income (other than payments to which section 6042(a)(1), 6044(a)(1), 6047(e), 6049(a), or 6050N(a) applies, and other than payments with respect to which a statement is required under the authority of section 6042(a)(2), 6044(a)(2), or 6045), or $600 or more in any taxable year, or, in the case of such payments made by the United States, the officers or employees of the United States having information as to such payments and required to make returns in regard thereto by the regulations hereinafter provided for, shall render a true and accurate return to the Secretary, under such regulations and in such form and manner and to such extent as may be prescribed by the Secretary, setting forth the amount of such gains, profits, and income, and the name and address of the recipient of such payment.

All persons engaged in a trade or business and making payment in the course of such trade or business to another person, of rent, salaries, wages, amounts in consideration for property, premiums, annuities, compensations, remunerations, emoluments, or other gross proceeds, fixed or determinable gains, profits, and income (other than payments to which section 6042(a)(1),6044(a)(1), 6047(e), 6049(a), or 6050N(a) applies, and other than payments with respect to which a statement is required under the authority of section 6042(a)(2), 6044(a)(2), or 6045), or $600 or more in any taxable year, or, in the case of such payments made by the United States, the officers or employees of the United States having information as to such payments and required to make returns in regard thereto by the regulations hereinafter provided for,shall render a true and accurate return to the Secretary, under such regulations and in such form and manner and to such extent as may be prescribed by the Secretary, setting forth the amount of such gross proceeds, gains, profits, and income, and the name and address of the recipient of such payment. What does this mean for your business?

Normally, you would tally up receipts for your payments to your vendors and include them in the relevant sections of your tax return as business expenses. Now, with these changes, you will have to issue a 1099 to each vendor, whether individual or corporation, from whom you purchased over $600 of goods or services during the fiscal year and send a copy of that 1099 to the IRS. This is in addition to the 1099s you had to issue previously.

You’ll also be receiving a 1099 from each business to which you sold over $600 of goods or services.

Each new 1099 will need to be reported on your tax return at the end of the year.

This will cut the bottom out of the lawn and grounds maintenance industry. A lot of illegals will be affected.

People are going to work for cash only, you mean.

I asked my doctor what he thinks of OBAMA CARE. He threw his arms up into the air and said LOUDLY “Momma Mia Help Me, Momma Mia Help Me!” He said it is going to be so bad. He already had to hire people who do nothing but sit on the phone all day making calls trying to get permission for tests and treatments, calling insurance companies and Medicare, etc. He has a lot of elderly patients. He said you can't put 30 million more people into the system and have the price go down, said this is going to cost us, you and me, a lot of money. He said already he has to get permission to treat his patients while the patient is WAITING for it! I asked if I should get all those tests that he has been asking me to get for years, mammogram, colonoscopy, etc. He said YES! So I will be getting all these little old lady tests that he has been trying to get me to have for MANY years. He said after we get Obama Care we will have to get permission for every test, and we will have to wait a long time to get them.

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