Senators Introduce Bills to Repeal Form 1099, Opposed by Gold Dealers
Source: Kitco, Allen Sykora††(1/25/11)
"The law would require entities to file a Form 1099 with the IRS for transactions over $600."
Senate Finance Committee Chairman Max Baucus (D-Mont.) and Senate Majority Leader Harry Reid (D-Nev.) issued a statement Tuesday saying they have introduced a bill for repeal of the controversial rules that otherwise are scheduled to go into effect in 2012. Additionally, Sen. Mike Johanns (R-Neb.) said in a column posted on his Web site Monday that he intended to introduce legislation Tuesday continuing his past efforts to repeal the 1099 rules.
The law, as it currently stands, would require entities to file a Form 1099 with the International Revenue Service whenever they make transactions paying out $600 to another party.
The provision was included in health-care legislation passed last year. The measure does not create a new tax, but instead establishes a paperwork trail to force those who should be paying taxes to do so, if they arenít already. However, the rules are opposed by a wide range of business groups who say it creates a paperwork burden, including farmers, truckers, shop owners and self-employed Americans.
Precious-metals shops may be one of the most heavily impacted sectors since the $600 threshold is less than half of the current price for one ounce of gold, meaning a substantial percentage of transactions will require increased paperwork. A spokeswoman for the Industry Council for Tangible Assets (ICTA) has said this is the issue on which the organization gets the most telephone calls from members. ICTA is a national trade group for the rare coin, precious metals and tangible assets industry.
Both Republicans and Democrats previously have sought repeal, although measures so far have failed largely due to differences on how to deal with any revenue that purportedly would be lost by nixing the new 1099 rules.