Final Chapter Not Yet Writ Re Onerous 1099 Rules

In theory there are some horrible new rules stating that a business will have to send 1099 forms to just about EVERYBODY they spend more than $600 with, beginning 2012. (In the past these forms were only sent to non-corporate labs, your cleaning crew and other self-employed folks who provided services or rent.) The new law requires sending forms to corporations and adds the sale of tangible goods to the list of transactions.  So businesses (not individuals) are pretty much required to send a form to just about anybody for anything you spend money on!

This is a huge burden, and there are plenty of folks trying to scare you to death on the internet. However, there is a little noted sentence in the law stating that the IRS is to issue Regulations to set forth details as to how to carry out the purpose of the law.  Well the IRS does not want to have to deal with a gazillion forms any more than you do. The business and CPA organizations will be lobbying hard to come up with some practical ways to minimize the hassle and yet still pick up on suspicious underground transactions. So, if you sell stuff regularly on eBay, you can probably expect a 1099. But routine and recurring purchases from established retailers may be exempt. Stay tuned!

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About Kate Willeford, Dental CPA & Advisor

Dental CPA & Advisor serving accounting, tax, management, transition and financial planning needs of dentists since 1975.
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