Did you forget to read the fine print of the newest 2,000 plus pages of Health Care Reform? Do you know what health care, taxes and filing requirements all have in common? If you haven’t read through the newest Health Care Reform Laws or even read a synopsis, then your answer is most likely, nothing. And yes, on the surface the Health Care Reform Laws do appear to have nothing to do with taxes and stipulations for IRS filing.
Underneath however, the new Health Care Reform Law has served as an opportunity through which to conceal and pass various taxes and requirements through Congress. It may appear that the revenue raised through these taxes and new filing requirements will in fact help facilitate and pay for the health care reform. But, if you take a good look at the language used in the bills, it does not necessitate that congress use the money gained to pay for reform.
Recently, the Healthcare and Education Reconciliation Act of 2010; a bill whose primary goal is to expand healthcare to the 31 million uninsured Americans, added a 3.8% surtax on net investment income to those considered high-income persons (earning over $200,000 annually and over $250,000 for a couple who files their taxes jointly). (For more information on this bill refer to Healthcare Law and Sales Tax Article). Its sister bill, the 2010 Patient Protection and Affordable Care Act (Health Care Act, P.L. 111-148) which was also drafted to expand healthcare to those uninsured, includes (IRC §6041(h)), that for payments made after 2011, persons engaged in a trade or business must file an information return (typically on the 1099 form series) with the IRS for all payments totaling $600 or more in a calendar year to a single payee.
By hiding these seemingly small provisions into bills that will presumably pass, the Congress is essentially sneaking extra taxes and regulations into existence. Numbers that give the impression of being inconsequential such as the requirement of one form per transaction over $600, can add up and end up costing companies thousands to just file these extra forms with the IRS. Also, by not being transparent about these new rules, the government is making it very difficult for people to plan for the rule in order to abide by it.
This type of rule, in order to abide; will require new accounting systems, filing systems and more detailed vendor databases at the very least. Luckily, the IRS has asked for help in drafting the provisions for this requirement and public is allowed to submit their input up until September 29, 2010 (To submit a comment, visit the IRS website).
This instance of hiding increased taxes and IRS requirements amongst health care reform provisions is just one example of many where Congress attempts to sneak rules and regulations through and into law. Let this serve as a wake-up call to stay informed and aware of what is happening in the government, because it does affect you. As more is discovered, I will keep you informed.
Posted by Clint Coons, asset protection attorney, Seattle, WA
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