Money & Company

Tracking the market and economic trends
that shape your finances.

« Previous Post | Money & Company Home | Next Post »

Is new tax provision a squeeze on small business?

January 6, 2011 | 12:00 pm

U.S. Rep. Dan Lungren (R-Gold River) has reintroduced a bill that would eliminate a new tax rule that many say would disproportionately affect small businesses.

The provision, set to go into effect in 2012, would require all businesses to file a special form with the Internal Revenue Service to report payments to freelance workers, as in the past, but also for stores, vendors and anybody else from whom they buy more than $600 in goods or services over the course of a year.

The new provisions were intended to help collect taxes from businesses and individuals that fail to report all their income. But small business owners and many accountants say that expanding the Form 1099 requirements would generate huge accounting bills and so much paperwork that both businesses and the IRS would be overwhelmed.

The Treasury Department says the measure would generate $17 billion in additional tax revenue. The IRS has said it would work with businesses and hold hearings to make sure the law is not implemented in an onerous way.

But Lungren -- along with 185 cosigners -- says the measure should be repealed.

What do you think? (Be civil, please!)

-- Sharon Bernstein

Follow me on Twitter @sharonbernstein

Comments 

Advertisement










Video