I was looking forward to a new presidential reign where the little guy and small business owner had a better chance of success and even survival but one of the provisions of the new “healthcare reform” legislation will significantly impact the administrative burdens of your business unless the IRS changes it.
Quoted from an American Society of Media Photographers newsletter
“As of now, starting next year, if you pay any person or corporation more than $600 in a year for goods or services, you must report that to both the IRS and the entity or person whom you paid. For example, if you bought a new camera or lens for $1,000, you would have to report that on your income tax returns and issue a 1099 to the company from which you made the purchase. Fortunately, there is now an exemption for credit card transactions, but that doesn’t apply if you paid by cash or check.
The good news is that the IRS has asked for comments from the public. Please copy and paste the sample letter below, edit it as you choose, and email it to Notice.Comments@irscounsel.treas.gov. Please be sure that the subject line of your email says Notice 2010-51. Please note that the emails must be sent by Sept. 29, 2010.
We understand the government’s desire to track cash transactions, but the current system would impose an unacceptable record-keeping and reporting burden on small businesses like yours.”
RE: Notice 2010-51
Dear Sir or Madam:
I am a professional photographer and a small business person. I have virtually no administrative staff to handle my record-keeping and reporting responsibilities. The new requirement under Section 6041 of the Internal Revenue Code would place impossible burdens on me. The exemption for credit card transactions was a great step toward reducing the impact of this change in the tax code. Unfortunately, it does not go far enough.
I often pay for computer and camera equipment, studio and equipment rentals, catering services, and other items by check or cash. Those expenditures often total more than $600 per vendor in any given year. Having to keep separate track of each of these items — and then to issue Form 1099’s to each vendor — would simply take more time than I have as the owner of a very small business operation, and it would require back office support that I do not have and cannot afford.
Please change the requirements so that they apply only to larger business entities, such as persons or entities that employ more than 25 people.
Thank you for your time and understanding.
It’s bad enough that our economy is in the toilet, but to put more stress on many already fleeting businesses is ridiculous. Anyone who owns a small business or has a friend or family member that does should take a few minutes and send this email to the IRS or write your own thoughts (Remember to put Notice 2010-51 in the subject line).