Posted on 09/30/2010 12:46:14 PM PDT by bbernard
(CNSNews.com) – Millions of Americans who own rental property are in for a bit of a rude awakening, beginning in January.
Congress has presented a bill to President Obama that would expand the IRS Form 1099 reporting requirements set out in the health-care reform law to include private citizens who own rental property.
The Patient Protection and Affordable Care Act, President Obama’s health care law, requires that small businesses file a Form 1099-MISC with the IRS for any goods they purchase from an outside vendor valued at over $600.
But the new bill, the Small Business Jobs and Credit Act (H.R. 5297), extends the mandate to private individuals who own property from which they receive rental income. Those people would also now have to fill out paperwork reporting any expenditure they make on that property valued over $600 for the year.
Section 2101 of the bill accomplishes this by considering anyone receiving rental income as “engaged in a trade or business.”
(Excerpt) Read more at cnsnews.com ...
Time to get those 1099 confession forms all warmed up for engaging in the war crime free enterprise capitalism.
The computer will match all the 1099’s you filed, compare that with the expenses on your schedule c f or e and send you the bill for the difference.
DID YOU KNOW THAT THERE IS A STATEMENT IN THE HEALTH CARE BILL STATING THAT IRS HAS THE AUTHORITY TO DECIDE WHAT A REASONABLE BUSINESS EXPENSE IS. Good by tax court and laws passed by legislation.
LOL! Most of my big expenses are with Home Depot-
hope the IRS has fun crosschecking their accounts
but seriously I guess this makes all landlords full time business people and we dont have to worry anymore about proving we are fulltime real estate professioanls or about “passive income” rules
Section 2101 of the bill accomplishes this by considering anyone receiving rental income as “engaged in a trade or business.”
actually, that’s an improvement over us evil landlords receiving “unearned income”
but I don’t get this - we already have to be prepared to document every expenditure on the property to claim it as an expense
Words have meanings...............
No, it's an expense to the people who have to write out the 1099's. And at such a low threshold, it's a big extra PITA accounting expense.
If the government has a question about a landlord's income, his books (with bank records and recorded check stubs) are available.
Basically, the 1099-MISC forms that you submit to the IRS can no longer be hand-written. They must be optically readable by machine. You must call the IRS and ask to have shipped to you the special machine-readable forms. You must put only the special forms into your inkjet printer (PDF blanks not accepted). See IRS Pub 1220 (page 5) and the Form 1099 instructions (page 101).
The IRS penalty for unacceptable 1099s is $50 per item.””””
I do books for 2 clients. They are the only employees. I do all their 1099’s at year end.
I currently type their forms, which I buy at the office supply store.
I do not have any computer set up that connects to any ink-jet printer.
I am not going to purchase a complete new system to provide about 6-9 1099’s in any given year.
I will continue to send them in typed form.
If that is not acceptable, the Feds are going to find out that lots of 1099’s are not going to be sent to them.
There are millions of businesses in this country who struggle to provide even the most basic data to the government. Demanding ‘electronic’ transfer or data on tape or anything like described above, will be beyond their skill & financial level of compliance.
This is a nightmare.
That part of the Constitution became inoperative under the Clinton Administration.
Won't happen. The issue is that they can audit anyone for their record keeping, including the 1099's. Any bets that won't be done selectively against the politically unfavored?
I can’t see tax bills resulting directly from this, but only tax audits.
You must call the IRS and ask to have shipped to you the special machine-readable forms.”
I cannot tell you how many times in the past 20 years I have tried to contact the IRS by phone to get any forms.
They have closed offices all over the country & now are massively expanding the forms you must comply with.
This will be awful.
what “income”
I have a true negative cash flow on my rental, have for years, and this year after sitting vacant for 5 months (usually rented in a week) we are back to getting same rent we were able to get in 1999 :-(
I console myself with knowing obama gets less money if I get less money
Exactly!
Continue to make things more complicated and controlling to create many more tax violators in order to increase revenue via more fines.
Unfortunately, it doesn’t violate the ex post facto clause. See Calder v. Bull
I have done books for small companies for 35 ++ years.
The 2 clients I still work for do not have e-file capability. I do not have such capability from my house or the computer which I have the accounting records on.
They will not get compliance from us.
One client is looking for an excuse to stop working altogether——above the radar. He can disappear below the radar & no one will know the difference.
This is a nightmare.
It is all or nothing. Will our newly elected conservatives change this? Time will tell.
You still need to call the IRS 800 number to get the red Copy A forms and file them along with Form 1096”
In the last 20 years, I have never been able to reach the IRS with a phone call.
If you have 250 or more 1099s you must file the ‘A’ copies electronically.
If you use paper there is a $50 penalty for each item after the 249th.
The electronic format required by the IRS is a bizarre 750-column fixed layout with no spaces. (For example: Two dollar amounts 199.95 and 395.95 would look like 0001999500039595).
The format goes back to the punchcards of the 1960s. I’ve worked with the format and it is a nightmare.
The electronic filing is just the A copy. You still have to stuff the B copy in an envelope and mail it to the recipient. Keep the C copy on file for at least 3 years.
Calder v. Bull wouldn’t apply in the case of criminal penalties.
...and increase the possibility that you'll be able to find something to prosecute just about any citizen who has the temerity to question you. Selective prosecution of political opponents becomes even easier than it already is.
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