New Federal Tax Law Adding to Confusion and Frustration of Taxpayers

 Welcome to another new year and new batch of federal and state laws. By now, you would think we should expect more red tape and hoops from any new law that is passed. For all the talk from the President and Congress about making government leaner and more responsive, we get yet another example of the government wasting taxpayer time not to mention added expense. This new federal law requiring a 1099 form for any purchase or sale for more than $600 be filed by any business owner. This is cited from http://www.wmicentral.com/news/latest_news/new-laws-to-govern-behavior-of-rich-poor-alike/article_cfac5b38-37e9-11e1-ba27-0019bb2963f4.html :

"Perhaps the most controversial of all new laws is the change to 1099 forms and reporting that is supposed to start in 2012. Added to Obama’s health care reform package, the new law will require any person or business that sells or buys more than $600 in any kind of merchandize or services to file a 1099. As an example, if a small business writes checks or pays cash to an office supply store that total more than $600 in a year, they would have to send that store a 1099 form. It has been reported that the bill was repealed earlier this year, but because the requirement was estimated to bring in over $19 billion in the next 10 years and it was signed into the government’s budget, Congress will have to raise other taxes equaling $19 billion or raise the deficit. It is not clear at this time exactly what will happen with this law, so if you own a business or pay any vendor $600 a year, you should consult a tax professional."


  It seems the government cannot pass any tax law which does not entail more paperwork or forcing small businesses to hire a CPA to muddle through all the various required tax forms for these laws. Instead of simplifying tax codes, the government adds to the IRS labyrinth. How many potential new small business owners will this discourage instead of encourage? The question is WHY? Does the government trust small business owners to report the expenses and/or sales like they reported the previous year? What happened to scrapping the tax codes and starting over from scratch as many politicians had proposed a few years ago? The saddest part of this is that very few people other than politicians knew of the new potential law.

  As we face a very uncertain economic future, where are the politicians and their promises to simplify taxes and increase new business opportunities? Perhaps, we should oust all our present government officials and find representatives with backbones to tirelessly work to get rid of the red tape and needless laws. Let's not let apathy stop us from leaving a better legacy for future generations of Americans.