New IRS merchant reporting - form 1099-K

[motion]

Anyone have any experience with this? Effective Jan 1, 2011, credit card processors are required to report your GROSS merchant deposits to the IRS. I can't for the life of me figure out why this is needed, since the GROSS and NET are two completely different numbers, and as far as I know, your GROSS numbers are not shown on your tax filings (total receipts).

Any number of things can reduce your GROSS amount:

Cost of goods
Chargebacks
Refunds
Cash back
Etc

I can understand the IRS looking for more compliance, but this doesn't make sense at all to me.

[GH85Carrera]

What? You expect the IRS and tax laws to make sense? HAHAHAHAHAHAAH

[Hugh R]

In Los Angeles they have a business gross receipts tax. So they are establishing a basis for doing that nationally to fund Obamacare, no, I'm not making that up. I remember reading it when Obammycare was starting.

[jwasbury]

My buddy sells a lot of stuff online. He got a 1099 from Paypal this year for the first time.

[Rick Lee]

Originally Posted by jwasbury

My buddy sells a lot of stuff online. He got a 1099 from Paypal this year for the first time.

This is BS. It's like a 1099 is the new way to CYA and rat out everyone else. What good does that do PayPal? Their fees are their income. A seller's PP activity is not necessarily income and it adds more compliance burden BS on them.

[RWebb]

they want everyone's Gross so they can plug everyone into their statistical compliance models

it has no relation to any of the crazy stuff hugh posted above

[Hugh R]

Really? CNN money says differently. It was part of the healtcare bill to make sure they get better tax compliance to fund obamacare.

New tax reporting rules leave IRS to mop up Congress's mess - Jul. 9, 2010

[Rick Lee]

Originally Posted by RWebb

they want everyone's Gross so they can plug everyone into their statistical compliance models

it has no relation to any of the crazy stuff hugh posted above

How is it part of my gross if I'm selling old junk on eBay for less than I paid for it?

[red-beard]

Wasn't this killed last year?

Obamacare 1099 Repeal, Victory! - QuickBooks-Blog

Yep, April 5th last year.

[motion]

Originally Posted by red-beard

Wasn't this killed last year?

Obamacare 1099 Repeal, Victory! - QuickBooks-Blog

Yep, April 5th last year.

Ummm, that blog link is highly suspect. Full of typos. And, it does not refer to repeal of the 1099-K.

[MBAtarga]

It is worth noting that smaller merchants are exempt from the reporting requirements. Payment service providers must submit 1099-K forms only for sellers with $20,000 in annual revenue and 200 transactions in the calendar year. Both conditions must be met to trigger the reporting requirement.
From:
Lawmakers Back Bill to Simplify 1099-K Reporting Requirements

also:
IRS Clarifies 1099-K Reporting for 2011 Taxes
IRS Clarifies 1099-K Reporting for 2011 Taxes | Reuters

[red-beard]

My issue may be a different 1099 Issue. The 1099 issue I'm talking about was all transactions over a certain dollar amount would require a 1099. The 1099-K issue is different.

[RWebb]

Originally Posted by Hugh R

,,, doing that nationally to fund Obamacare, ,,,,,,.

"The new rules are aimed at reducing the "tax gap" between what individuals and businesses owe and what they actually pay. The federal government misses out on estimated $300 billion each year from tax underpayment. "