An Ugly Side Effect of New 1099 Law: More Tax Evasion
# 2 , # 4 , # 8.
Thanks, george76.
Posted on 01/21/2011 1:37:54 PM PST by george76
Tax pros now fear that tax evasion could go viral if the health-reform bill’s new 1099 requirement takes effect next year. They say more small businesses will likely opt to do all-cash transactions under the table to avoid the 1099 reporting requirement, and all of its onerous provisions, which are worse than small businesses may realize.
That's the direct opposite effect of what lawmakers had hoped for, and it would pose a bad development for the Internal Revenue Service, which for years has been under pressure from Congress to bring in more tax revenue. That revenue is needed now more than ever, as Social Security and Medicare teeter into the red, and as more states rely on federal revenue to fill their budget holes.
Olson says there is cause for concern about identity theft with the new 1099s...
The Taxpayer Advocate also notes the new 1099 form could create a huge paper tsunami at the IRS. At least 38 million taxpayers will be subject to the new requirement, including 26 million who run sole proprietorships, two million farming businesses and one million charities...
There’s more. “Small businesses may have to acquire new software or pay for additional accounting services, incurring additional costs,” in order to transmit these forms...
And get this -- if a small business makes individual purchases of $600 or more from at least 250 vendors during a calendar year, it must also by law file forms 1099 electronically to the IRS. That’s even more costly, because the small business would have “to pay a per-report fee charged by an e-file service provider,”
(Excerpt) Read more at foxbusiness.com ...
Well, when there aren't enough criminals one makes them. One declares so many things to be a crime that it becomes impossible for men to live without breaking laws. Who wants a nation of law-abiding citizens? What's there in that for anyone? But just pass the kind of laws that can neither be observed nor enforced or objectively interpreted – and you create a nation of law-breakers – and then you cash in on guilt. Now that's the system, Mr. Reardon, that's the game, and once you understand it, you'll be much easier to deal with." (Atlas Shrugged 1957)
bookmark
Obama’s National Civilian Security Force.
http://www.youtube.com/watch?v=Tt2yGzHfy7s&feature=related
Being more like Europe means massive tax evasion.
/johnny
The legislation that creates this para-military force purports to pre-empt the authority of State governors to control their own National Guard, absent war, which the Constitution does not authorize.
I lived in Germany for 15 years (up until Dec 09). When I needed my windows replaced in the house....it was all done under the table for 30 percent less on cost. When I needed my tub replaced...it was done under the table for twenty percent less. When my front door steps needed total replacement...under the table...around 35 percent less. When I needed a brake job...all cash and under the table...about twenty percent less than the average.
In the old days (the 1970s)...it was the rich who went off to Switzerland to hide their money. Today...Johan the plumber drives down to the border once a year in a RV, and literally walks across the border with a backpack to the first Swiss village and deposits his $25k in black revenue into a Swiss bank. The same is true in Luxembourg. These aren’t rich folks...it’s the guys pulling in $1000 on a weekend for two days of hard work and refusing to report the actual income. We will do the same thing...in a very quick order.
Any little thing can be the spark now. Any little thing. And then events will take on a life of their own. Pity the unprepared. But not too much.
Good Call.
I say let's embrace and celebrate some real diversity (of compliance).
Yes, we’ll become Mexico.
It’s a feature, not a bug!
I don’t agree with this. The only way I see this happening is if normal business expenses triple. It’s of no advantage to pay cash for deductible expenses for the overwhelming majority of businesses, since those businesses never receive cash.
Meanwhile, all these IRS agents are going to be sorting through 1099’s for heating bills, for plumber’s bills, for electrical bills, for insurance bills. Stupid.
An Ugly Side Effect of New 1099 Law: More Tax Evasion
# 2 , # 4 , # 8.
Thanks, george76.
Old Annie sure was the Isaiah of our day, wasn't she?
Then the government get no tax revenue as Johan walks across a border.
Greece, Italy...even worse ?
whywork.org
could sweep the nation like in EU and Canada
It not only can happen, it will happen. Barter and black markets are inevitable ways that a normal market will deal with national socialism. The next step is an inevitable crackdown by authorities followed by more creative and clever ways to carry on commerce to avoid these crackdowns, ranging from the very simple (mere bribery of the enforcing authorities to look the other way) to the highly complex.
Each 1099 has a W9 , too.
too much paperwork
McDonalds, Wendy's etc for $25,000.
The local Casino for $250,000.
The gas station for $100,000.
and on and on and on.
See how long businesses put up with this crap.
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