Monday, May 24, 2010

Hee hee! I like it!

I don't spend a lot of time with Lew Rockwell. Nothing bad, but the site lost my interest year before last with its "All-Ron-Paul-All-The-Time" editorial policy and just never got me back. But I do enjoy me some Gary North from time to time, and this morning's essay is a beaut. "The 1099 Tsunami" gleefully shares the subversive possibilities of a little-remarked provision of Our Glorious Leaders' shiny new health care bill...
...that will force businesses to file 1099 forms on every transaction with another business for over $600. Buy a $601 used car for your business? You must file a 1099. The Cato Institute describes this law.

Basically, businesses will have to issue 1099s whenever they do more than $600 of business with another entity in a year. For the $14 trillion U.S. economy, that's a hell of a lot of 1099s. When a business buys a $1,000 used car, it will have to gather information on the seller and mail 1099s to the seller and the IRS. When a small shop owner pays her rent, she will have to send a 1099 to the landlord and IRS. Recipients of the vast flood of these forms will have to match them with existing accounting records. There will be huge numbers of errors and mismatches, which will probably generate many costly battles with the IRS.
Gary North's solution to this problem? What problem? Give'em what they want!
The IRS will be buried in billions of new forms. I'm an older guy. I think back to Carl Sagan's memorable words in the 1980 PBS series, Cosmos: "billions and billions." These forms will have to be scanned into the system. If businessmen want to protest this law in a legal but effective way, they will have their tax preparers write in the numbers by hand. Then IRS will have to type in the data on each form by hand. Billions and billions!
...
GIVE THEM WHAT THEY ASK FOR: PAPER

Business owners and managers will be outraged. But what if word spreads? "No electronic filing!" What if the tax preparers fill in all the forms by hand. It is legal. It is not efficient, but it's not all that much extra work. Pay a few dollars more per filing. At the other end, the IRS will get to process these forms by hand. Think of what happens if businesses were to challenge every challenge by the IRS? The business's CPA simply asks in writing – I do mean writing (hand-written) – for the IRS to review the case. Point out one mistake made by the IRS. Automatically, every business should challenge every request for more tax money. No exceptions. Be polite. Just ask the IRS to review its case in terms of this new information. There are always gray areas. Put them to use. Pay a few bucks to your tax preparer. Paperwork is the essence of every bureaucracy. Let's do it by the book: with paper.
Can you say white mutiny, boys and girls?

I knew you could.

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