For all you income tax wonks, remember when I stumbled across the 1099 reporting changes contained in the ACA? Well, others have uncovered the hidden time bomb as well.
But wait - there may be some good news (sorta).
The Taxpayer Advocate Service estimated the new requirement will affect 40 million businesses and other entities. Those include about 26 million sole proprietorships, not counting farms.Yup, this will be the new marketing answer for credit cards. We'll be heating our homes with junk mail from Capital One!
The IRS "will face challenges making productive use of this new volume of information," the mid-year report said. "In our view, it is highly likely that the IRS will improperly assess penalties that it must abate later, after great expenditure of taxpayer and IRS time and effort."The requirement could bury the IRS in tens of millions of paper filings that it will have to pay employees to process or discard, Olson said through a spokesman.The requirement, which was intended to help pay for the health-care legislation, is projected to raise $13.7 billion over 10 years, according to Olson's report. That does not include the IRS's administrative costs.Under an IRS proposal, many purchases made with credit or debit cards would be exempt from the requirement because the IRS obtains information about them through other channels, the IRS has said.The agency is trying to do what it can to minimize the burden on businesses and is seeking public comment on how it might do so, spokesman Terry L. Lemons said. [More][My emphasis]
'Tis an ill regulation that blows nobody good...