Small business owners around the country may breathe a sigh of relief. Congress has recently repealed burdensome IRS reporting requirements which would have forced them (as of 2012) to issue 1099s for every service provider and vendor (no matter what business form i.e. corporation, partnership, limited liability company (LLC), or sole proprietorship) with whom they did business where the total annual aggregate of all transactions exceeded $600. According to several tax attorneys, the requirements had been part of Obama Care legislation (formally known as the Patient Protection and Affordable Care Act) supposedly intended to improve taxpayer compliance thereby helping to fund healthcare.
The new legislation, called The Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act of 2011, eliminates the requirements of reporting total aggregate payments of $600 or more to corporations which are not tax exempt and/or involving transactions where gross proceeds are paid in consideration for any type of property.
Good new for business owners who were stressing over anticipated mountains of extra paperwork to the IRS. But tax lawyers and other tax professionals warn the new legislation amends the IRS Revenue Code and its changes should be carefully reviewed and considered in future tax planning.
Business owners who have compliance questions are encouraged to seek out advice from a qualified tax attorney or other tax professional. If the business is already behind in issuing 1099s for 2010, then consulting a competent tax lawyer as quickly as possible is paramount. Similarly, if the business and/or its owner have unfiled returns or owe back taxes, seeking out the help needed is critical to fixing the problem.
Changes in tax laws can be scary for everyone, particularly small businesses without adequate internal resources to help remain in compliance. The tax laws themselves tend to be unnecessarily complicated, overly complex, and often too arcane. So getting help from a tax lawyer schooled to wade through this mine-field for the unwary is typically a prudent decision. If you have questions and/or need help to manage your tax liabilities or just have some questions about tax planning, speaking with a competent tax lawyer is one good way to get some answers.
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