The Obama health care bill included a requirement that was little noticed, unless you own your own business. I don't recall exactly when this provision takes effect (2011?) but it requires all businesses to file 1099s for purchases totalling $600 in a year from any single provider. There are no exceptions. The Republicans offered up amendments that haven't gone anywhere, and the final effort occurred in the Senate where it failed.
This is a cheap way to make sure small businesses report their income and expenses correctly. Unless of course they don't at all. Somehow or the other the revenue raised by this law, amounting to $17B, is supposed to help pay for a prevention and public healthcare fund. I don't know if this $17B is previously unpaid revenues. If it is, well let's go get it but is this the truly best way?
You do realize the alternative is to fund more IRS Revenue Agents to find the money and then get it collected? Are you ready to grow that government agency? I am sure the IRS is gearing up for a flood of paper and the resulting income matching with filed returns. Depending on how it goes, we may see additional audits coming out of this in the next few years as business owners work on making sure their records are squeaky clean. Whether or not this actually results in signficant revenue collection remains to be seen.
The Republicans are howling that this is the end of the world as we know it because of the harm to businesses. They aren't howling loud enough to be heard at CNN, or anywhere else that I know of. It sure isn't gracing the front page of The Chicago Tribune. This is not TEOTWAWKI, but is going to cost small businesses, and they will indeed pay the price. Major corporations already have the technology in place to track this. It will take some modification to add the 1099 requirement, but that is likely a marginal cost to them. Not so for the mom and pops that don't employ sophisticated technology to manage their books, and who never file 1099s.
I am all for everyone paying their fair share of taxes. It is the right thing to do. But even if this is successful, I am less than impressed with this hamfisted effort to collect new revenue on the backs of the very businesses that we rely on to power the economy. Depending on the state you operate in, and the type of work you do, requirements can be quite onerous, especially in a weak economy. Best hopes for no new business closures.