@jackmcg Said
This piece was in the July 17, 2010 edition of the Wall Street Journal. It is somewhat related to another post that went up this morning in POLITICS, but stands on its own. Apparently, the IRS is being tasked with enforcing the new healthcare bill recently passed into law....
...Unfortunately, the Administration is speaking as if this is a positive development. It looks as though the IRS will hire, at least, hundreds of new agents to oversee this part of US taxpaying and this may cause personal tax audits of private citizens to soar. Good? Bad? What have we gotten into here?
The story further reports that small business must now report not only value purchased, but goods purchased at the end of each year. It was quietly placed in the new healthcare bill before passage.
Please read the story to get an accurate take on what, as a small business, you will have to do. It will affect all sole proprieterships and S corporations, as well...
...Where are we headed in all this?
As you must have realized, in citing that article from CNS, the tasking of the IRS with tracking any requirements stemming from the Obama-HCR was evident shortly after its passage. It has been a truth that many of us have had to swallow, for many months now. The only thing remarkable is that it has taken the WSJ so long to editorially react. Had I been enabled as a publisher, able to reach millions of readers, my own opposing reaction would have been made vocal long ago, but only after the contents of the Health-Care Reform Bill were made available -- too late, but a lot sooner than the reaction from the WSJ! Now, we are faced with another 'law' and until anarchy breaks out, we law-abiding folk will feel compelled to comply. That doesn't make the requirement 'lawful,' since the opposing opinions may rise and eventually challenge or repeal the entire fiasco.
As for your small business and reporting the Cost of Goods Purchased:
I am trying to help run a small business, myself, and any good accounting system [software] practically forces you to make entries that can be summarized in a timely manner, and picking out the CoGP is no more difficult than extracting the CoGS, from the same summary report. True, it is a 'new' reporting requirement, but this particular one is not, in my opinion, difficult to comply with.
@That WSJ Article Said ...Ms. Olson also exposed a damaging provision that she estimates will hit some 30 million sole proprietorships and subchapter S corporations, two million farms and one million charities and other tax-exempt organizations. Prior to ObamaCare, businesses only had to tell the IRS the value of services they purchase. But
starting in 2013 they will also have to report the value of goods they buy from a single vendor that total more than $600 annually ?- including office supplies and the like.
Democrats snuck in this obligation
to narrow the mythical "tax gap" of unreported business income, but Ms. Olson says that the tracking costs for small businesses will be "disproportionate as compared with any resulting improvement in tax compliance." Job creation, here we come . . . at least for the accountants who will attempt to comply with a vast new 1099 reporting burden.
The difficulty lies not in the reporting, but in the fact that it will give the IRS another parameter to use, to see just whether your
declared income (gross and net) is anywhere near your
actual income for any income period. It represents a tightening of the Taxman's Noose, never a welcome occurance, but inevitable...