Wednesday, May 26, 2010

the health care legislation will inadvertently swamp the IRS with 1099s

Gary North at makes a fabulous point about the impending explosion of 1099s, attached to the health care "reform".

Earlier this year, some staffer in some office on Capitol Hill dutifully inserted a provision into the health insurance bill that will force businesses to file 1099 forms on every transaction with another business for over $600. Buy a $601 used car for your business? You must file a 1099...The result: A blizzard of new tax forms that the Internal Revenue Service will begin rolling out next year...

The IRS will be buried in billions of new forms....If businessmen want to protest this law in a legal but effective way, they will have their tax preparers write in the numbers by hand. Then IRS will have to type in the data on each form by hand....the IRS has been unable to modernize its system after a decade. It will take another decade. It may take two. Now some staffer has created a 1099 tsunami for the IRS, which will hit in 2013....

Paperwork is the essence of every bureaucracy. Let's do it by the book: with paper.


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