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Tax pros now fear that tax evasion could go viral if the health-reform bills new 1099 requirement takes effect next year. They say more small businesses will likely opt to do all-cash transactions under the table to avoid the 1099 reporting requirement, and all of its onerous provisions, which are worse than small businesses may realize.
That's the direct opposite effect of what lawmakers had hoped for, and it would pose a bad development for the Internal Revenue Service, which for years has been under pressure from Congress to bring in more tax revenue. That revenue is needed now more than ever, as Social Security and Medicare teeter into the red, and as more states rely on federal revenue to fill their budget holes.
Indeed, three Senate Democrats wrote to House Speaker John Boehner on Thursday urging the House to vote to repeal the 1099 provision. "The [1099 provision] is particularly onerous for small businesses..who cannot afford to employ extra lawyers and accountants to comply with the new rules," Senators Ben Nelson, Maria Cantwell and Amy Klobuchar wrote.
Read more: An Ugly Side Effect of New 1099 Law: More Tax Evasion | Fox Business
That's the direct opposite effect of what lawmakers had hoped for, and it would pose a bad development for the Internal Revenue Service, which for years has been under pressure from Congress to bring in more tax revenue. That revenue is needed now more than ever, as Social Security and Medicare teeter into the red, and as more states rely on federal revenue to fill their budget holes.
Indeed, three Senate Democrats wrote to House Speaker John Boehner on Thursday urging the House to vote to repeal the 1099 provision. "The [1099 provision] is particularly onerous for small businesses..who cannot afford to employ extra lawyers and accountants to comply with the new rules," Senators Ben Nelson, Maria Cantwell and Amy Klobuchar wrote.
Read more: An Ugly Side Effect of New 1099 Law: More Tax Evasion | Fox Business
