I'm sure many of my readers already are aware of this new law that is to take affect in January 2012, but for those who aren't aware and are living in the U.S. it should be of interest. It is just another example of just how desperate that government is and to what lengths they will go to try and track every dime you spend and every move you make. Those who buy gold believing that it is the ultimate protection in the event of a currency melt down may find they will be targeted just when they need it the most. What does this have to do with Panama? They don't have such reporting requirement here.
What makes matters worse is that this law was buried in the 906 page health care law and no one had an opportunity to review or debate it. As discussed in this report from Bob Bauman, gold purchases will be reportable making this one last area of freedom no longer viable. Best to load up before it takes affect!
From Bob Bauman;
Americans are already outraged by President Obama's new health care law. And now, many are up in arms about a little-noticed provision buried deep in the 906 pages of that law.
“The 2010 Patient Protection and Affordable Care Act” (Health Care Act, P.L. 111-148) contains a sneak provision (IRC §6041(h)) that is set to directly impact you.
This law requires any person engaged in a trade or business to file an IRS Form 1099, reporting all payments totaling $600 or more in a calendar year to any single person, other than a tax-exempt corporation (non-profit). No, they don’t care to know who donated $600 to a local animal rescue. Only that Joe Schmo sold you an old pick-up truck for $750 for your lawn service company.
He’d better pay tax on that transaction! And you are responsible for getting him the forms and, at the same time, submitting them to the IRS. And when you mail off your rent check for your equipment bay, guess what…Time to send the old 1099s to the IRS and your landlord.
But that’s not all! Even corporations are affected. That’s right. That John Deere lawnmower you just bought? Again, you’ll need to mail a 1099 to the IRS and John Deere.
Small Businesses Outraged. Rightfully So.
Pat Heller, owner of Liberty Coin Service in Lansing, Mich., is mad, according to ABC News. He said, “I'll have to hire two full-time people just to track all this stuff, which cuts into my profitability.”
And you know what less profitability means for the IRS? Less tax revenue.
Just think for a minute about every financial transaction between businesses and individuals or other businesses which exceed $600… That’s a whole lot of paperwork!
Hard on small business, hard on big business. That translates to, “hard on the economy.” Is this really the time to be creating extra hassles for small businesses struggling to stay afloat?
Every U.S. business, and individuals as well, will be forced to obtain the tax ID number and/or the Social Security number of everyone with whom they do more than $600 worth of business in a year. It takes effect on Jan. 1, 2012 -- and it applies to all U.S. business and private transactions.
Based on 2009 IRS data, about 40 million businesses and other entities will be subject to this 1099 debacle, at greatly increased cost and trouble. There’s only one word to describe the paperwork and reporting requirements: Draconian. Small-business owners are already complaining that the time and effort it will take to obtain this documentation will be a drag on business. That’s assuming that a lot of small transactions aren’t driven to the black market!
America: Land of the … Tax Evader
This provision is based on the IRS’s unproven belief that millions of Americans are evading taxes.The bureaucrats’ idea is that IRS computers can process hundreds of millions of Form 1099s, comparing them against each buyer’s Form 1040, to see if reported income and purchase numbers match.
Of course, this onerous restriction was never explained during the health care debate in Congress -- and if it had been it would have likely been defeated. But that’s what you get when you can’t determine what’s in a spending bill until it becomes law. Shame on Congress.This is yet another example of legislators using sneak provisions in an inches-thick bill to impose policies that would otherwise have been rejected. The same tactic was used in March when the “HIRE Act” was adopted containing a potential 30% tax on offshore banking transactions by U.S. persons.
An exercise in total fiction: Sponsors claimed the Form 1099 provision will expose what the IRS thinks is a vast ocean of uncollected income taxes … and will supposedly help to pay the trillions the health care law will cost. Without any proof, they predict the 1099 requirement will raise $17 billion over the next 10 years. And this was the law that Obama insisted would impose no new taxes.
But Now for the Really Scary Part…
Precious metals such as coins and bullion fall into this new 1099 category and U.S. coin dealers are among those most outraged by the new law. And it’s on privacy buffs’ and freedom lovers’ radars for another reason.
Those who remember history recall that Americans’ freedom to own gold (except for jewelry, dental, and numismatics) was made illegal after 1933, when President Franklin D. Roosevelt issued an executive order prohibiting gold ownership. Those who value their right to own gold note the obvious:
The 1099 reporting rule will tell IRS agents who owns gold and where they live.
Bob Bauman
Legal Counsel
The Sovereign Society
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