The NWO's Chains

New Rules: You And The IRS This January

by David Nguyen, Activist Post

The new ObamaCare1099 rule for reporting of all cash, credit and check business transactions of $600 or more is scheduled to begin January of 2012.  This is really an extension of the 2008 Housing and Recovery Act IRS rules that start this January when merchant banks and PayPal will report business sales directly to the IRS (the reporting threshold is $20,000 and 200 transactions a year).

These new IRS rules will affect every American:

• Income tax collection could rise as much as $345 billion a year
• Small businesses will be crushed and unemployment will rise
• A cashless economy is further set in motion
• IRS snooping and audits will increase
• Gold can be tracked
• Identity theft is a risk
• Government surveillance will increase

THE TAX GAP

ObamaCare requires that businesses and self-employed individuals submit 1099 forms to the IRS for all business purchases of $600 or more.  The stated purpose for this is to close the ‘tax gap’ which is the difference between the amount of what is “owed” and what is paid, due to lack of reporting and under-reporting, and is estimated at $300 billion dollars a year.  Last week, the Senate failed to repeal the ObamaCare 1099 rule because they could not agree on how to make up the “lost” revenue that would be generated from strict reporting, which they estimated to be $19 billion over 10 years, which is a GROSS underestimate.
document from the Senate Committee on Finance in 2009 states that the intention is to close the tax gap (estimated at $345 billion here).  If the IRS is 100% successful, they will collect $345 billion a year in extra tax money.

The key issues are under-reporting and non-reporting, so the government’s remedy is to require voluminous detailed record keeping and reporting by businesses and private contractors.  They want to monitor how much each business brings in and how much they spend, almost down to the penny (or $600 anyway).

According to the Senate document, the IRS targets businesses with assets under $10 million for the 1099-MISC forms, as they found that only 8% of them file the forms. The IRS expects the so-called “voluntary” income reporting rate to jump from the current 46% to 95%. This means that the IRS aims to collect $345 billion a year by requiring mountains of detailed paperwork from businesses and independent freelancers.  Individual filers are also targeted by the IRS. Traditionally, the IRS 1099-MISC form has been used primarily to report independent contractor income (a service), but it now includes the sales of goods totaling $600 or more in course of business.

The purchaser or buyer is responsible for issuing 1099 forms for all business transactions. However, this rule applies only to business exchanges, so individuals will be spared from collecting 1099 forms from grocery stores, for example, if the purchases are for personal use and outside of business.

The new measure is reported to have been waiting in the wings for the right opportunity and now that it is law, and with so much money on the line, it will be almost impossible to repeal.  Even if it was repealed, the Housing Recovery Act, a companion to ObamaCare tax laws, goes into effect January 2011.

THE HOUSING AND ECONOMIC RECOVERY ACT OF 2008 (HR 3221)

Originally, the 2008 Housing Act required merchant banks and third party processors to report volume business sales of $600 or more to the IRS, but PayPal pressured Congress into raising the reporting threshold to 200 credit transactions and payments over $20,000 a year. Any business that uses a merchant bank account or third party network like PayPal with 200 credit transactions and sales of $20,000 or more needs to keep meticulous records because their financial data will be sent directly to the IRS. This begins January 2011.

This new provision will allow the IRS to supervise credit and debit payment streams that were formerly difficult to track.  In the past, the IRS needed a subpoena from a judge to get information from merchant accounts.  Now the IRS can spy on merchant accounts and audit without notice.  Further, the IRS can guesstimate cash sales based on credit sales and compare those to similar businesses. If the IRS deems the cash sales as being too low, it could trigger an IRS inquiry or audit.

Because merchant banks and third party processors will send data directly to the IRS, they will have access to information not only on the sellers, but also the BUYERS! The volume aggregate sales will be sent directly to the IRS, but records of individual sales will be stored as back up data so the IRS may have access to individual buyer information.

Taxation is a function of government, but now banks and third party processors are part of the equation. Identity theft is a risk for self employed individuals and small businesses that use their Social Security numbers as Tax ID numbers with the new bank tracking system.

OBAMACARE AND THE DEATH OF CASH

Close to 60% of Americans oppose ObamaCare and the new 1099 reporting is a way to offset the cost.  While the IRS contends that this is not a new tax, it can be argued that it is new because of the 1099 reporting now includes of sales of goods.  Even if some States, businesses and individuals reject ObamaCare and want to opt-out, the taxpayer is still stuck paying the bill.

The IRS is the enforcer of ObamaCare. The IRS has the power steal money from bank accounts, garnish wages, put people in jail and some IRS agents carry guns.

ObamaCare reinstates the original $600 credit sales reporting rules of the 2008 Housing Bill and massively expands it by mandating that EVERY business transaction of $600 or more, whether it is cash, check, credit, or any other thing used for payment, to be reported to the IRS with 1099 forms.

For example, if a freelancer buys more than $600 dollars worth of office supplies over the course of a year from Staples, the individual will be required to 1099 Staples and to collect their Tax ID Number.

Additionally, small businesses and self-employed individuals will receive a 1099 form from each business that they sold over $600 worth of goods or services and will have to supply their Tax ID or Social Security Number to the purchaser.

Doug Shulman, IRS Commissioner, said that credit card and debit card purchases will be exempt from reporting with the 1099 forms because payment processors will already be reporting the transactions to the IRS. Under the guise of eliminating the burden of paperwork for small businesses and independents, this is really a step toward a cashless economy because people will want to avoid the extra paperwork and will embrace electronic transactions.

Read more at this link.

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