REPEAL THE SMALL BUSINESS PAPERWORK MANDATE

CPAS and Small Businesses - Support H.R. 5141
"The Small Business Paperwork Mandate Elimination Act"

Passage by Congress of the national health care legislation had an unintended consequence and possibly its first victim "SMALL BUSINESS IS GOING INTO CARDIAC ARREST!!"

The Law as it now stands requires ALL businesses, beginning in the year 2012, to issue a Form 1099 to any vendor of services or property to which the business has paid more than $600 a year for those services or property. That is correct- all business to business tranactions to anyone, whether companies or individuals must get a 1099! Penalties will be imposed on all businesses that fail to comply with this law.

It is obvious that Washington has no idea what they are doing! They're doing a great job at killing small business. This little item was added to the health care legislation as a revenue generator with little understanding of the consequences.

Now they have decided to go after the underground economy and use supercomputers to cross reference a zillion plus 1099s so that they can find tax cheats. First of all this will never work. Secondly -the paperwork required to accomplish this is unfathomable and will cost more to enforce than the revenue generated.

Here is an example to show you how absurd this law is:
If a small business uses an American Express card to charge items from 200 vendors during the month for gas, meals, office supplies, airline tickets, etc - a 1099 at the end of the year would not be issued to American Express but rather to all the different companies on the monthly statement. Two hundred 1099s would need to be issue to each and every of those vendors the company purchased products or services from . Since the address and Taxpayer Identification Number of each vendor is needed to issue a 1099, every small business will need to send every vendor a W9 form to obtain their Taxpayer Identification Number and receive it back signed. If it is not returned, the vendor will be required to withhold further payment to that vendor.

This is the law. The only group that will benefit from this new law are the accountants! More Billable Hours!!!

This law is so bad that even the Internal Revenue Service on July 1st invited public comment on how to most effectively carry out this law change. The IRS is looking for guidance on how to avoid duplicate reporting and minimize the burden on business. Under "proposed" regulation, business purchases made with credit or debit cards would be exempt from the new reporting requirements.

HELP REPEAL THIS LAW- The CPA Profession has enough work to do. HR5141 has been introduced in Congress to repeal this burden.
Contact your representative ASAP! What do you think?
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