Tax reporting and the associated recordkeeping is becoming a nightmare for businesses in this great country of ours. Congress has no concept of simplification and should be punished by having to keep records and prepare reports for some of the ridiculous business tax laws they come up with.
The inability of politicians in Washington DC (the majority of which I am beginning to believe lack any common sense) to create tax laws which are understandable and easy to comply with, is unbelievable.
Case in point, take tax legislation requiring businesses to file reports (known as 1099’s) for payments made to other businesses for services provided. Sound like a fairly simple item to report the amount of money your business has paid to another for their service?
Provided below is a sampling of some of the tax law for this very topic under Code Section 6041(a):
“All persons engaged in a trade or business and making payment in the course of such trade or business to another person, of rent, salaries, wages, premiums, annuities, compensations, remunerations, emoluments, or other fixed or determinable gains, profits, and income (other than payments to which section 6042(a)(1), 6044(a)(1), 6047(e){d}, 6049(a), or 6050N(a) applies, and other than payments with respect to which a statement is required under the authority of 6042(a)(2), 6044(a)(2), or 6045), of $600 or more in any taxable year, or, in the case of payments made by the United States, the officers…”
There are pages and pages of regulations, interpretations, and other gibberish describing this simple issue of reporting the amount your business paid for services to another business. Unfortunately, this 1099 reporting is only going to get worse over the next couple of years. This insane complexity costs all of us in both dollars and in the ability to compete in this increasingly competitive world of ours. Congress, how about some simplification? If the politicians in DC cannot get it done why run for reelection; let someone else give it try.