Is this too much or what? Tax forms for coin purchases

[MBA101]

Imagine what would happen to our hobby if this law was left standing, and it could be:

 

http://www.coinnews.tv/?p=1015

 

Every coin transaction of $600 or more (even trades) would require a 1099 form to be filled out and sent to the IRS.

[Mark T]

Yes some "insufficiently_thoughtful_person" proposed this legislation , unless it is repealed it will become law in 2012. You would see a lot of coins flood the market as people sold before this became law. Something like this will push a lot of people out.

FYI – the tax rate for collectibles is 28 % for items held one year or longer , less then a year you are taxed at your regular tax rate. This is the opposite of capital gains on stocks where long term investments are taxed at a lower rate . IRS really puts the crews to us here.

 

 

[MBA101]

It sure makes collecting as a hobby no longer worth it. I can guarantee that there will be mostly undocumented transactions between collectors once this goes into effect. Most dealers will be put out of business. All the "funds" that this law is supposed to confiscate will not transpire, and the result will be a higher unemployment rate. This law pertains to all collectibles, not just coins. Think about watching shows like Pawn Stars where they now say "Here, fill this 1099 out, and then we can write you up" or the American Picker guys walking around with a big box of paperwork for whenever they make a $600 purchase.

 

No sane person will follow this law, and it will be unenforceable due to the lack of IRS agents to track all the paperwork.

[comicparadox]

Reminds me of the three best lies ever:

1. "Oh that - it's just a cold sore - don't worry".

2. "Of course I'll still love you in the morning".

3. "Hello. We're from the government and we are here to help you".

[shirohniichan]

It sure makes collecting as a hobby no longer worth it. I can guarantee that there will be mostly undocumented transactions between collectors once this goes into effect. Most dealers will be put out of business. All the "funds" that this law is supposed to confiscate will not transpire, and the result will be a higher unemployment rate. This law pertains to all collectibles, not just coins. Think about watching shows like Pawn Stars where they now say "Here, fill this 1099 out, and then we can write you up" or the American Picker guys walking around with a big box of paperwork for whenever they make a $600 purchase.

 

No sane person will follow this law, and it will be unenforceable due to the lack of IRS agents to track all the paperwork.

 

This is a classic case of "stage one thinking". Some insufficiently-discerning legislator thinks, "If we can get more taxes we can cut our deficits, so if we tax more transactions we'll be saved."

 

Will it drive some dealers out of business? Yes. Will it lead to the decline in hobby shows? Yes. Will the decline in shows and collectible business hurt other businesses? Yes. Will that damage lower tax revenues? Yes. Will it damage the hobby? Yes.

 

However, whoever supports this hasn't thought that far yet.

[gmarguli]

This is typical of the socialist who never ran a business now running this country. Close a $17B loophole by creating a logistical nightmare and massive paperwork which will cost the businesses much more than $17B to comply, all the while the government will have to spend a fortune to hire tons of new people to process the paperwork.

 

All this will do is drive sales off the radar. No way does a customer give me their SSN so I can send them a 1099 at the end of the year. It'll just be more cash transactions that the government gets no piece of instead of a smaller than they'd like.

[pendragon1998]

Greg makes a good point. I trust a lot of you guys enough to send a couple hundred for a coin or whatnot, but I don't want to give you my social security number (much less give it to some unknown on eBay).

[Mark T]

This is typical of the socialist who never ran a business now running this country. Close a $17B loophole by creating a logistical nightmare and massive paperwork which will cost the businesses much more than $17B to comply, all the while the government will have to spend a fortune to hire tons of new people to process the paperwork.

 

All this will do is drive sales off the radar. No way does a customer give me their SSN so I can send them a 1099 at the end of the year. It'll just be more cash transactions that the government gets no piece of instead of a smaller than they'd like piece.

 

Good point about the cash transactions .

Another note about a 1099 . If you pay someone cash and they still ask for a 1099 you can put whatever information you want on that 1099 form as long as they don’t ask for an ID such as a license.

 

[Mark T]

Greg makes a good point. I trust a lot of you guys enough to send a couple hundred for a coin or whatnot, but I don't want to give you my social security number (much less give it to some unknown on eBay).

 

Pay Pal would issue a 1099 for EBAy transactions. You wont have to provide this to the seller.

[ultra-crepidarian]

Remember on March 9, when Speaker Pelosi said "... we have to pass the bill so that you can find out what is in it ..." well this is what's in it.

 

I can’t believe that this incredibly expensive, non-productive, job-killing law will stand. If it does, and the law becomes effective January 1, 2012, it will actually simplify my business accounting and tax reporting since my businesses will be closed on December 31, 2011. … Bye-bye small business.

 

By the way the domain name BlackMarketBullion.com is still available: Any takers?

 

[Mark T]

Even now people bypass the 1099 law especially if payments are made in cash .

This law will effect online – EBAY- Palpal sales and other non cash sales . If I go to a show and pay cash for a coin do you think a dealer will turn me away because I wont give him a 1099 ? Most wont. This will have a dramatic negative effect on line and all Auction sites .

 

[DC Dawg]

On one hand, everyone wants the government to balance the budget and since two wars were put on the books, the budget looks worse than it has been. Stuff has to be paid for and congress has to find ways to generating revenue.

 

On the other hand, cut something and get the money from someone else... leave my money alone.

 

This reminds me of the Harry Truman quote, "Give me a one-handed economist! All my economists say, On the one hand on the other."

 

Ok... now that I have that out of my system, let's talk about some reality.

 

Do you sell coins that total more than $600 and that income not taxed? Do you sell more than a total of $600 on eBay? Do you sell more than a total $600 in other revenues? If you said yes to any of those questions, you are supposed to pay taxes on that income. Under the current law, taxpayers are supposed to pay taxes on that money. You are supposed to report that income on your 1040 and pay the appropriate taxes.

 

Did you pay your taxes? Most people do not. A study that was published by the GAO shows that billions of dollars are being lost in taxes from eBay, cash, and other transactions. These are taxes that is supposed to be payed under the current law but not paid because the loopholes in the self-reporting aspect of the law does not require documentation that could force you to pay the income. Most people ignore this and the taxes go unpaid.

 

As congress is wont to do, they take the problem and go overboard with a fix, because that is what they do. Sometimes, congress will overplay their hand knowing the bill will be cut down during markup, the other chamber, or in conference committee so they hope their core ideas will remain in the bill after the sausage making process.

 

Don't like the bill? Write you member of congress. Tell them what you think. It's their job to listen to you... they are supposed to represent you. Make them accountable.

 

For the record, I do report all my income--not because I am patriotic or a nice guy... aspects of my job puts me near the top of the "to be audited" list. When I am audited, I don't want problems!

 

Scott

[MBA101]

On one hand, everyone wants the government to balance the budget and since two wars were put on the books, the budget looks worse than it has been. Stuff has to be paid for and congress has to find ways to generating revenue.

 

On the other hand, cut something and get the money from someone else... leave my money alone.

 

This reminds me of the Harry Truman quote, "Give me a one-handed economist! All my economists say, On the one hand on the other."

 

Ok... now that I have that out of my system, let's talk about some reality.

 

Do you sell coins that total more than $600 and that income not taxed? Do you sell more than a total of $600 on eBay? Do you sell more than a total $600 in other revenues? If you said yes to any of those questions, you are supposed to pay taxes on that income. Under the current law, taxpayers are supposed to pay taxes on that money. You are supposed to report that income on your 1040 and pay the appropriate taxes.

 

Did you pay your taxes? Most people do not. A study that was published by the GAO shows that billions of dollars are being lost in taxes from eBay, cash, and other transactions. These are taxes that is supposed to be payed under the current law but not paid because the loopholes in the self-reporting aspect of the law does not require documentation that could force you to pay the income. Most people ignore this and the taxes go unpaid.

 

As congress is wont to do, they take the problem and go overboard with a fix, because that is what they do. Sometimes, congress will overplay their hand knowing the bill will be cut down during markup, the other chamber, or in conference committee so they hope their core ideas will remain in the bill after the sausage making process.

 

Don't like the bill? Write you member of congress. Tell them what you think. It's their job to listen to you... they are supposed to represent you. Make them accountable.

 

For the record, I do report all my income--not because I am patriotic or a nice guy... aspects of my job puts me near the top of the "to be audited" list. When I am audited, I don't want problems!

 

Scott

 

It is ignorant to blame wars for our current problems, when the bailouts totaled way more than all wars that we have fought in HISTORY COMBINED. And who was it that attacked us first anyway??

 

You miss one point here about paying taxes on coin sale income: Most of us collectors take any sale of a coin to purchase another coin, or more coins, WHICH IS NOT INCOME AND IS NOT TAXED! My records from all my purchases and few sales/trades have become so convoluted over the years, it has become impossible to track to the source of where it all started to begin with. And I sure as heck ain't going to start filling out forms every time I want to buy-sell-or trade a coin.

 

 

[Hard Times]

It is ignorant to blame wars for our current problems, when the bailouts totaled way more than all wars that we have fought in HISTORY COMBINED. And who was it that attacked us first anyway??

 

You miss one point here about paying taxes on coin sale income: Most of us collectors take any sale of a coin to purchase another coin, or more coins, WHICH IS NOT INCOME AND IS NOT TAXED! My records from all my purchases and few sales/trades have become so convoluted over the years, it has become impossible to track to the source of where it all started to begin with. And I sure as heck ain't going to start filling out forms every time I want to buy-sell-or trade a coin.

 

 

Er, ah, well, since you asked, we can blame our war in Iraq on POTUS from 2001 to 2009. We attacked first. We did not start this war with those who attacked us, we instead started this war with 'But he tried to kill my daddy', as POTUS so eloquently said when he was pushed for why he went to war in a press conference. And in fact, take a look at our war budget for the past decade, several $100s of billions every year for killing and war, combined total equal to or much more than Bush junior and Obama bailouts over the last couple years (although I don't support the bailouts either).

 

Bush quote about Daddy link

 

CNN Bush Saddam and Daddy

 

Me being the good citizen that I am, I actually keep receipts for all purchases and sales, and report all profits/loses as captial gains on my 1040 each year. Like noted, you don't do this and you get audited, you are toast baby! Those who have been on the black market for coins and haven't reported your income, well you are the ones that made this bill happen. Those of us who stay legal, like me, like Heritage, etc. we won't have a problem with this. They will somehow have to solve the issue of using SSNs on the 1099s though. I won't give that out for a coin purchase or sale, and no one else is likely to be that dumb. So yes I am out of the coin world if the 1099s are too intrusive, no worries lots of other things to do in life but the problem was brought on by those who have not stayed legal in coin buisness

 

MBA101, er, ah, do you really have an MBA or are you jest foolin' us? Your comments about records suggest the latter..........

 

So thank you black marketeers!

[MBA101]

It is ignorant to blame wars for our current problems, when the bailouts totaled way more than all wars that we have fought in HISTORY COMBINED. And who was it that attacked us first anyway??

 

You miss one point here about paying taxes on coin sale income: Most of us collectors take any sale of a coin to purchase another coin, or more coins, WHICH IS NOT INCOME AND IS NOT TAXED! My records from all my purchases and few sales/trades have become so convoluted over the years, it has become impossible to track to the source of where it all started to begin with. And I sure as heck ain't going to start filling out forms every time I want to buy-sell-or trade a coin.

 

 

Er, ah, well, since you asked, we can blame our war in Iraq on POTUS from 2001 to 2009. We attacked first. We did not start this war with those who attacked us, we instead started this war with 'But he tried to kill my daddy', as POTUS so eloquently said when he was pushed for why he went to war in a press conference. And in fact, take a look at our war budget for the past decade, several $100s of billions every year for killing and war, combined total equal to or much more than Bush junior and Obama bailouts over the last couple years (although I don't support the bailouts either).

 

Bush quote about Daddy link

 

CNN Bush Saddam and Daddy

 

Me being the good citizen that I am, I actually keep receipts for all purchases and sales, and report all profits/loses as captial gains on my 1040 each year. Like noted, you don't do this and you get audited, you are toast baby! Those who have been on the black market for coins and haven't reported your income, well you are the ones that made this bill happen. Those of us who stay legal, like me, like Heritage, etc. we won't have a problem with this. They will somehow have to solve the issue of using SSNs on the 1099s though. I won't give that out for a coin purchase or sale, and no one else is likely to be that dumb. So yes I am out of the coin world if the 1099s are too intrusive, no worries lots of other things to do in life but the problem was brought on by those who have not stayed legal in coin buisness

 

MBA101, er, ah, do you really have an MBA or are you jest foolin' us? Your comments about records suggest the latter..........

 

So thank you black marketeers!

 

I like the way you cite state-run media propaganda. The war started against TERRORISTS and those who harbor them. Clinton wanted to take out Iraq back in 98. And everyone was FOR that. You and the blame Bush crowd need an education. The whole anti-Iraq thing is just politics and Bush Bashing. Though Bush 1 should have finished the job back in 1990. Not that that would have stopped the attacks on 911 but at least we would have had one less thing to worry about, and we would have had a launch point to invade Iran and keep them in check.

 

If there is no income from coins, then there is nothing to report. If you are a collector, as long as all the profits from a sale are going toward another purchase, then you have nothing to report. Unless some IRS agent is following you around, nothing under 10K even gets recorded anywhere anyway. I have all my recent records around, but many of the ones that are 10 years or older are a different story. I would not report ticky-tacky $10 or 20 dollar profits on $200 coins anyway. Just a ridiculous amount of paperwork to keep track of. And no I do not have an MBA. MBA stands for something else.

 

 

[truthteller]

What has happened is that effective Jan. 1, 2012, the whole system of giving and receiving Internal Revenue Service 1099 forms will be turned on its head and all persons (including corporations) who are in business will now have to give 1099 tax reporting forms for coins and other goods that they sell as well as buy.

 

 

Please be accurate with the information. This law is CURRENT and will be implemented starting 2012 for 'business to business' transactions, not for the hobbyist who buys and sells to raise money or collect coins.

 

 

 

 

TRUTH

[jtryka]

The point that's been missed so far (likely since this is a coin forum) is that I've seen nothing in Sec. 9006 that indicates this only applies to coins and collectibles!

 

From the article that's been most quoted:

 

SEC. 9006. EXPANSION OF INFORMATION REPORTING REQUIREMENTS. (a) IN GENERAL. – Section 6041 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsections:

 

‘‘(h) APPLICATION TO CORPORATIONS. – Notwithstanding any regulation prescribed by the secretary before the date of the enactment of this subsection, for purposes of this section the term ‘person’ includes any corporation that is not an organization exempt from tax under section 501(a).

 

‘‘(i) REGULATIONS. – The secretary may prescribe such regulations and other guidance as may be appropriate or necessary to carry out the purposes of this section, including rules to prevent duplicative reporting of transactions.’’

 

(b) PAYMENTS FOR PROPERTY AND OTHER GROSS PROCEEDS. –

 

Subsection (a) of section 6041 of the Internal Revenue Code of 1986 is amended –

 

(1) by inserting ‘‘amounts in consideration for property,’’ after ‘‘wages,’’

(2) by inserting ‘‘gross proceeds,’’ after ‘‘emoluments, or other’’, and

(3) by inserting ‘‘gross proceeds,’’ after ‘‘setting forth the amount of such.’’

 

This is way more than $600 coin sales, this is flat screen TVs, Cars, Furniture, Airline tickets, my hotel room in New York a month ago ($665 + tax), in the last 2 months, as an individual I would have been required to issue 7 different 1099 forms! Don't think that might crimp economic activity? I wrote my congressman on it today and encourage all of you to do the same.

[ultra-crepidarian]

1. This is the law, it is not a proposal.

2. The full effect of the law will not be known until the administrative IRS regulations are written (this will have to be done in 2011)

3. The true purpose of the proposal is not what it appears to be. The law was inserted into the Health care bill to help the bill pass by demonstrating how the bill would be revenue neutral - there was no vetting done on the proposal.

4. You are correct jtryka; the law was not targeted at the numismatic community it applies to ALL businesses.

5. I simply can’t imagine that this law will stand – because it would be devastating to small business – it would be a job killer and would not do what it was intended to do – not the type of reform that you want to introduce in a recessionary economy. It is a ridiculous proposal.

6. If the law is not reversed it will largely not be complied with (and this has nothing to do with tax cheats it has to do with the administrative burden on small businesses and the inherent complexity of the regulation)

7. To the extent that the law is complied with, the number of returns generated will overwhelm the IRS’s ability to process the information in any meaningful way. There is no way that the IRS computer systems can handle this. It would take them years to gear up to handle the volume of returns generated by this law.

 

So I am not going to lose a lot of sleep over this law although I would definitely agree with you that people should write their Congressman. You have to remember he or she probably hasn’t read the bill yet so they don’t know what is in it. Actually reading bills before you vote on them is like so yesterday. Welcome to the “New Normal”.

 

[DC Dawg]

It is ignorant to blame wars for our current problems, when the bailouts totaled way more than all wars that we have fought in HISTORY COMBINED. And who was it that attacked us first anyway??

First, I never said it was THE cause for the debt. Second, this is not a political forum or I would remind you how Iraq never attacked the US nor had weapons of mass destruction.

 

You miss one point here about paying taxes on coin sale income: Most of us collectors take any sale of a coin to purchase another coin, or more coins, WHICH IS NOT INCOME AND IS NOT TAXED! My records from all my purchases and few sales/trades have become so convoluted over the years, it has become impossible to track to the source of where it all started to begin with. And I sure as heck ain't going to start filling out forms every time I want to buy-sell-or trade a coin.

Under the rules for investment income, if you buy a coin at one price and sell it for another, you have a windfall, which is taxable. If that windfall is used to reinvest in more coins, that money is not taxable. However, if you have a windfall greater than $600, then you owe taxes.

 

Coins are considered an investment. So are any other collectibles with tangible value (an IRS definition). Thus if you trade in stamps, baseball cards, beads, or Llardro statues, these rules apply, too.

 

As for what you do or do not do, I would be careful what you say on an open forum that is searchable by a public search engine. You never know who could be watching!!

 

Scott

[mtnstyne]

OK, as a 17 year vet who is on my third deployment and currently in the 11th month of this one in Iraq I am compelled to respond to the claim that the wars have driven the country into the debt we see today.

 

The 2010 budget for all wars and security related to the wars in Iraq and Afghanistan is $139 billion. The total since 2001 would just this year add up to $1.08 trillion.

 

In comparison, our annual expense for social security($695b), medicare($453b), medicade($290), unemployment, and other social programs total over $1.7trillion/year. We could remain at war another 5 years and not equal one year of social programs. Wait until the healthcare bills start adding to the total. Social security alone accounts for 20% of the federal budget.

 

We are in debt because we have moved from an industrialized nation to socialized nation with big gov't and a future of increasing taxes that will continue to stiffle small business which is the backbone of our country.

 

I will not argue that there is gov't waste in the military...I see it everyday and do my part to eliminate what I can. However, we do more work with less resources than any organization and we do it out of loyalty to our country to provide everyone the freedoms such as the one that allows you to post your opinions on this forum.

 

And yes it gets me worked up...but I digress. All I would ask is that when you look at the national debt you actually look at where your tax dollars go. I personnaly think that the war helps the economy...in 2011 when Iraq shuts down there are going to be about 50k civilian contractors that are in Iraq looking for jobs. Just my thoughts. I feel better now....sorry for going off topic. I don't like the law either....

[pendragon1998]

For crying out loud...can we drop the Iraq debate? This is a coin forum.

 

 

Please be accurate with the information. This law is CURRENT and will be implemented starting 2012 for 'business to business' transactions, not for the hobbyist who buys and sells to raise money or collect coins.

 

 

Well, according to the IRS's definition of 'hobby' vs. 'business', what are most 'coin hobbyists'? True hobbyists or businessmen? I frankly don't want to think about it right now, so here's a link - discuss if y'all want.

 

Business or Hobby? Answer Has Implications for Deductions

 

More IRS gobbledygook

[Hard Times]

Here is a question then - if I were to buy coins and sell them, but do not claim I am a for profit buisness or for income purposes - i.e. I am not a full time dealer and this is not my profession, does IRS call what I am doing a 'hobby', or do they call this 'investing'? I am confused reading the links and from the comments above. Depending on which I am, how does this (or not) affect how I report losses or gains from the activity?

 

 

[gmarguli]

Some interesting comments about this new law from a CNN story

 

...IRS Commissioner Douglas Shulman announced a major exception to the new rules: The IRS plans to exempt transactions made through credit and debit cards.

 

...Joint Committee on Taxation -- a nonpartisan Congressional committee that analyzes pending tax legislation -- estimated that it would bring in only about $2 billion a year in new tax revenue.

 

 

[Houston Investor]

I am of course definitely opposed to this bill and believe the paperwork will leterally kill small business plus possibly lead to the demise of ebay. This will especially be unfavorable to to those engaging in big ticket transactions.

 

Many people in the coin business file a schedule C as far as IRS Reporting. Many in the business have incurred significant losses already due to the weak economy. If you can't get decent retail for your inventory, you will lose money. This increase in paperwork will increase the expenses in running the business thereby increasing these losses even further.

 

Business failure as a result of this coupled with individuals fed up with corporate and government intrusion resorting to underground operation will take even more revenue off the tax books.

[JJSingleton]

No organization is more fearful of this legislation than the IRS. They are now going to be so buried in 1099s they will not have time to match them up, and they know it. Big business is required to file electronically, but most small business still file paper returns.

 

All businesses already are required to deal with 1099s whenever they transact with vendors that are not corporations. This is not new. The $600 threshold has always existed. And that is not per transaction, it is for total annual transactions. I have no reason to believe coin dealers are currently exempt. If they are I would like to know why.

 

My understanding is the only real change here is that 1099s are going to be required for all vendors, even corporations. 1099s are no big deal. Most basic accounting software programs handle 1099s, including Quickbooks, the most popular accounting software used by small business. It will require obtaining some information from you vendors, but businesses are starting to include W9 information on invoices and receipts. I do not believe this applies for transactions between dealers and hobbyists (collectors) as that is not a B2B transaction. But if you are a part time dealer you better carry completed W9s in your briefcase. It will make it easier on you. About all I see out of this legislation is one heck of a bunch of trees will be killed and the Post Office will make some money in late January..

 

If you run a business using a checkbook as your ledger, then this will be a big deal. But you obviously are not following the current regulations. Truth is I suspect only about 20% of small business files required 1099s today. I do not believe this new legislation will increase compliance. As I suggested above, the IRS will be so buried in 1099s they will not have a clue is filing and who is not. This will only be an added burden to those of us that do comply with the current law and will continue to comply with the new regulations because that is what we do..

 

[World Colonial]

The idea that there are ANY "loopholes" of ANY kind whatsoever in the tax code is a fallacy. This kind of thinking is based upon the completely bogus premise that the money does not belong to the taxpayer which is false.

 

As for this requirement, I believe it has been covered here before and it is almost guaranteed to be one of the most ignored requirements ever, not just for coins but to anything else it covers.

[Frank Provasek]

First of all, for 2010 at least, no changes go into effect. Don't panic.

 

Congress and lawmaking is a mess, but as Winston Churchill said,

"democracy is the worst form of government except all the others that have been tried. "

 

Lets look at the back story:

 

The 2008 housing act tried to close some loopholes on 1099 forms for

 

real estate transactions (that definition of "property".)

 

killed it (although they DID include, and Bush signed, the provision to

 

have Paypal and credit card gross receipts reported to the IRS.) Of course,

 

THAT had nothing to do with HOUSING! And it didn't go into effect until the

 

next president was in office!

 

The "property" reporting was added back in with the same language in

 

the health care bill under "expanded reporting requirements." But THAT

 

had nothing to do with HEALTHCARE! (you see how quickly this is getting

 

messy.)

 

But in a healthcare bill rather than a housing bill, some thought "property"

 

meant EVERYTHING including "business inventory" and buying or selling

 

anything over $600 ("Secret gold coin tax snuck into healthcare bill',

 

"Obama forces us to be tax snitches" ) , and the story started

 

appearing everywhere, all based on the incorrect understanding of the

 

intent of that section. Most bills have a few conflicting or unclear

 

passages. These get fixed when the enforcing agency writes the rules,

 

or sometimes though court rulings.

 

Often the sponsors have to be asked "what did you REALLY INTEND

 

THIS TO DO?"

 

Texas, trying to ban gay marriage, passed a law, read literally, banning

 

ALL MARRIAGE. The law was never rewritten, but it's not interpreted by the

 

state government that way because it would be stupid.

 

Clearly the IRS does not want a form submitted on all these

 

transactions, but they haven't developed any rules yet because the

 

public comment period is still open (until 9-30-2010). You can sent a

 

comment to the IRS here

 

http://www.irs.gov/newsroom/article/0,,id=225029,00.html

 

Of course if you don't trust the IRS to ignore something this obviously

stupid

 

You can call your Senator and Congress member and ask them to support

 

S.3578 (Senate) and H.R. 5141 (house) which repeal these provisions

 

without waiting for the IRS to develop its ruling.

 

 

[CHABSENTIA]

First of all, for 2010 at least, no changes go into effect. Don't panic.

 

Congress and lawmaking is a mess, but as Winston Churchill said,

"democracy is the worst form of government except all the others that have been tried. "

 

Lets look at the back story:

 

The 2008 housing act tried to close some loopholes on 1099 forms for

 

real estate transactions (that definition of "property".)

 

killed it (although they DID include, and Bush signed, the provision to

 

have Paypal and credit card gross receipts reported to the IRS.) Of course,

 

THAT had nothing to do with HOUSING! And it didn't go into effect until the

 

next president was in office!

 

The "property" reporting was added back in with the same language in

 

the health care bill under "expanded reporting requirements." But THAT

 

had nothing to do with HEALTHCARE! (you see how quickly this is getting

 

messy.)

 

But in a healthcare bill rather than a housing bill, some thought "property"

 

meant EVERYTHING including "business inventory" and buying or selling

 

anything over $600 ("Secret gold coin tax snuck into healthcare bill',

 

"Obama forces us to be tax snitches" ) , and the story started

 

appearing everywhere, all based on the incorrect understanding of the

 

intent of that section. Most bills have a few conflicting or unclear

 

passages. These get fixed when the enforcing agency writes the rules,

 

or sometimes though court rulings.

 

Often the sponsors have to be asked "what did you REALLY INTEND

 

THIS TO DO?"

 

Texas, trying to ban gay marriage, passed a law, read literally, banning

 

ALL MARRIAGE. The law was never rewritten, but it's not interpreted by the

 

state government that way because it would be stupid.

 

Clearly the IRS does not want a form submitted on all these

 

transactions, but they haven't developed any rules yet because the

 

public comment period is still open (until 9-30-2010). You can sent a

 

comment to the IRS here

 

http://www.irs.gov/newsroom/article/0,,id=225029,00.html

 

Of course if you don't trust the IRS to ignore something this obviously

stupid

 

You can call your Senator and Congress member and ask them to support

 

S.3578 (Senate) and H.R. 5141 (house) which repeal these provisions

 

without waiting for the IRS to develop its ruling.

 

 

I see other disturbing trends. The U.S. Government owns 61% of General Motors now. General Motors just bought American Credit. American Credit specializes in people with low Credit. The mainstream media that reported it was stating that it was a great deal. There was only one sentence in all the articles that gave any hint which was "American Credit loans money to non prime borrowers. Apparently the Media hasnt equated non prime with subprime. American Credit specializes in people that have a Credit rating of 620 or less. The media and GM tout it as expanding their customers. Here are the steps

 

1. The Government /Taxpayers bail out GM

2. Bond Holders wp historically the Senior Crdit holders are pushed ot the end of the line.

3. GM runs a T.V. Commercial on how it is paying back the Government ,however, it is not mentioned that GM used another Bridge Laon to do it.The Media and GM state how wonderful they are doing in paying back the tax[ayer etc.

4. Now GM purchases a sub prime lender for Autos and it is also touted as improvement.

 

People also need to do a search on Bell California. This City is a suburb of Los Angeles. It has a population of 38,000 people. The City Manager gets an annual salary of 687,000..00 a year. The City Sheriff gets a Salary of $457,000 a year which is 50% more than the Sheriff of Los Angleles whic h is about ten times bigger or about 3.8 million people. Apparently California did pass a Law limiting salaries a few years ago,however, it specified non Charter cities so Bell had a vote and changed their City to a Charter city and either didnt notify the people are did it on a sly basis or the people didnt understand it which is probably the case and only 400 people voted.

 

Apparently the people resigned,however, they will still get their Pensions and in States such as California a person in the Public sector can get as much as 90% of their pensions and the City of Bell will have to pay it for the rest of their lives. About $600,000.00 a year for the City Manager.

 

California has a deficit of about 17 Billion because of these situations and about 7 Billion goes to just Emergency Medical Hospital services for Illegal aliens etc. California is the number one State for the larget deficit and Illinois is number two, There are thirty nune other states with varying deficits./

 

At some point, the taxpayers will have to bail them out. Of the Money spent from the almost 800 Billion Stimulus passed in February 2009 95% of it was spent on plugging Budget gaps, Medicaid. Food Stamps and Unemployment. There are presently 400 million people on food stamps at soem degree. The States have no money to keep this up.

 

The Average unemployment wage is $309.00 a week and Benefits. The Minimum Federal wage is $725.00 an hour or $290.00 a week before taxes. Wht would anybodt accept a job even paying $10.00 an hour before taxes?The Unemployment wage is figured on you last 52 weeks of Sa;ary so in some cases even higher wage earners are close. And they can get it for 99 weeks.

 

Foreclosures are up. The Government does not count you as unemployed unless you are unemployed and have actively been looking for work in the ast four weeks. If you count all the unemployed then the figure is between 16.5 and 17% since August 2009. The Government just released its figures and even though they use the phony 9.5% they estimate it at 9% for 2011.

 

Doesnt sound like a small problem for me.