By Neil deMause, contributing writerMay 21, 2010: 1:51 PM ET

NEW YORK (CNNMoney.com) -- The massive expansion of requirements for businesses to file 1099 tax forms that was hidden in the 2,409-page health reform bill took many by surprise when it came to light last month. But it's just one piece of a years-long legislative stealth campaign to create ways for the federal government to track down unreported income.

The result: A blizzard of new tax forms that the Internal Revenue Service will begin rolling out next year.

"It was actually something that we were following back under the Bush administration under the 2008 budget -- we started to see these kinds of rumblings about the 'tax gap' and whether or not businesses were paying their fair share," says Tom Henschke, president of the Pennsylvania-based SMC Business Councils, which was one of the first organizations to call attention to the health care amendment when it was introduced last fall. "So two administrations can claim credit for this."

The first tax-reporting expansion was buried in a different bill, the Housing Assistance Tax Act introduced by House Speaker Nancy Pelosi and signed into law by President George W. Bush in July 2008. Best known for its first-time homebuyers' credit, the bill also created a new addition to the family of 1099 tax forms: the 1099-K.

The 1099 is a catch-all series of IRS documents used to report non-wage income from a variety of sources like contract work, dividends, earned interest and pension distributions. The new 1099-K aims to shine a light on a currently hard-to-track payment stream: credit cards. Starting in 2011, financial firms that process credit or debit card payments will be required to send their clients, and the IRS, an annual form documenting the year's transactions.

The rule comes with a floor to weed out the most casual retailers: The 1099-K is only required when a merchant has at least 200 payment transactions a year totaling more than $20,000. But it applies to all payment processors, including Paypal, Amazon.com, and others that service very small businesses.

The goal of the new regulations is to catch income that is going unreported to the IRS. The federal government loses an estimated $300 billion each year from the "tax gap" between what individuals and businesses owe and what they actually pay.

The 1099 changes attached to the health care reform bill are another kettle of fish. These massively expand the requirements for filing the "1099-Misc" form, which companies use for recording payments to freelance workers and other individual service providers. Until now, payments to corporations have been exempt from 1099 rules, as have payments for the purchase of goods.

Starting in 2012, that changes. All business payments or purchases that exceed $600 in a calendar year will need to be accompanied by a 1099 filing. That means obtaining the taxpayer ID number of the individual or corporation you're making the payment to -- even if it's a giant retailer like Staples or Best Buy -- at the time of the transaction, or else facing IRS penalties.

http://money.cnn.com/2010/05/21/smallbusiness/1099_deluge/index.htm

You can also bet that they will eventually require the same from the Public at large, i.e. you again.

Then again, you may enjoy having your money taken from you and given to someone else. You always struck me as a sado-masochist of sorts.

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I am for it, if it will force the tax cheats to pay what they should.

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Why don't you and Warren Buffett get together? He seems to share your opinion on taxes. He thinks he should be paying more. If you and he pay more taxes, it will give us small guys a break. Hells bells, I might even take me a vacation for a change!

I mean, why give it to the deadbeats that produce nothing and stay home to collect another year of a free ride?

Oh, and how do you feel about the new death tax? It went from 0% to 35%. The govt. wanted 55%. If you'd like to leave your family some of your hard-earned money, you might think about heading for the "happy hunting ground" before they take it all. I mean, that's only fair right?

"Educate and inform the whole mass of people. They are the only sure reliance of the preservation of our freedom."
-- Thomas Jefferson

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I am more effected not by who pays and how much as what is done with the money after it comes to the hands of our so-called leaders, such as billions were squandered in Afghanistan and Iraq.

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Corporations do not pay tax, individuals do.

I have to side with WRJ on this one. I must be living on another planet. I do not complain about the cost of gas or taxes. It beats walking!!

I have to confess, I haven't paid any income tax for the last 20 years. All legal,Ifile every year. Just my classification number. Most people do not take advantage of all the tax deductions available to them.

By the way WF it was 2.3 TRILLION that the military lost. How in h*** does the govt. lose 2.3 trillion dollars? You don't lose 2.3 trillion, it was stolen.

It's a criminal organization run by a banking cartel. Wake up!!!!

News Flash: it's only a matter of time before they come for your pension and social security.

"Educate and inform the whole mass of people. They are the only sure reliance of the preservation of our freedom."
-- Thomas Jefferson

Edited by - mountainguy on 12/27/2010 1:44:31 PM

Edited by - mountainguy on 12/27/2010 1:46:55 PM

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Corporations do not pay tax, individuals do.

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111th Congress Added More Debt Than First 100 Congresses Combined: $10,429 Per Person in U.S.
Monday, December 27, 2010
By Terence P. Jeffrey

(CNSNews.com) - The federal government has accumulated more new debt--$3.22 trillion ($3,220,103,625,307.29)—during the tenure of the 111th Congress than it did during the first 100 Congresses combined, according to official debt figures published by the U.S. Treasury.

That equals $10,429.64 in new debt for each and every one of the 308,745,538 people counted in the United States by the 2010 Census.

The total national debt of $13,858,529,371,601.09 (or $13.859 trillion), as recorded by the U.S. Treasury at the close of business on Dec. 22, now equals $44,886.57 for every man, woman and child in the United States.

In fact, the 111th Congress not only has set the record as the most debt-accumulating Congress in U.S. history, but also has out-stripped its nearest competitor, the 110th, by an astounding $1.262 trillion in new debt.

http://www.cnsnews.com/news/article/111th-congress-added-more-debt-first-100

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