Let's Hope this Happens!

AICPA Asks Congress to Repeal New 1099 Requirements


WASHINGTON, D.C.

(JULY 27, 2010)

BY WEBCPA STAFF

The American Institute of CPAs has written a letter to members of the House and Senate asking them to repeal the section of the new health care law that requires businesses to report to the Internal Revenue Service any purchase from a vendor of goods or services worth $600 or more during the calendar year.

The AICPA said it would be burdensome and costly for small businesses to compile the data and prepare the Form 1099-MISC information return. Furthermore, the AICPA said the information collected on the 1099 forms will not be very helpful to the IRS in collecting any unpaid taxes that should have been paid by the vendor because it will be difficult to reconcile payments reported on the forms and income reported by the vendor.

The reporting requirement is included in the Patient Protection and Affordable Care Act and is effective for purchases made in 2012 that will be reported on 1099 forms filed in 2013.

“This expansion of information reporting may prove to be so burdensome to small businesses that we believe it will significantly contribute to the hurdles to growth and formation that businesses face,” wrote AICPA Tax Executive Committee chair Alan Einhorn.

“Repeal of section 9006 of the Act is the best alternative to imposition of an overwhelming compliance burden on the nation’s small business community,” he added.

New 1099 Requirements for B2B Transactions

A recent tax code addition will mean increased paperwork for small businesses.


By Bonnie Lee
July 14, 2010

I’ve got a bone to pick with our congressmen and congresswomen! You know how legislators sneak unrelated provisions into major bills? Yeah, well, they did it again. Section 9006 of the massive Patient Protection and Affordable Health Care Act will mean yet another huge paperwork burden for small business. It has to do with issuing 1099 forms; it has nothing to do with health care.


Beginning in 2012, all businesses will be required to prepare 1099s for all services and goods purchased from all vendors in excess of $600. Current law dictates that only services provided in excess of $600 must be reported via form 1099 and that corporations (with the exception of attorneys) are exempt from receiving 1099s.

Beginning in 2012, corporations will no longer be exempt, and purchases of goods must also be included. The passing of this legislation is an attempt by the government to close the $300 billion tax gap, which will help pay for health-care reform. So I guess it indirectly relates to the Patient Protection and Affordable Health Care Act in which it was included.

Depending on the industry, many businesses must collect, report and pay over a variety of excise taxes, as well. How much does all that cost your business in bookkeeping and payroll preparation fees? Now business owners must report all business-to-business transactions. So purchases your business makes from Staples, Office Depot and other vendors are included as reportable transactions. You must obtain every vendor's federal ID, track your purchases and prepare the form. This will involve many additional hours of bookkeeping time. It will be mandatory to get an accounting software upgrade because there will be a new form and new preferences to set within the software to track these numbers. It's great for all of the bean counters who can double, triple and maybe even quadruple their 1099 preparation fees. But at what cost to the small-business owner who is attempting to recover from this recession and keep her business going?

Speaking of 1099 reporting, the situation gets worse. Beginning in 2011, all credit card processing companies must report annual credit card transactions in excess of $20,000 and 200 transactions submitted to them for processing by any business on a new IRS form 1099-K.

I thought there would be overlap, but just as I fretted about this possibility, the IRS came up with a solution. So pay attention! If you pay for purchases with a credit or debit card, you are not required to issue a 1099. The credit card companies will do so. No overlap after all. You are only required to issue 1099s for payments made via check or cash. So I won't have to ask Office Depot for its federal ID after all. Because the format of form 1099 will change, we will all have to purchase the upgraded version of QuickBooks or whatever software is used for accounting and 1099 preparation.

It's still going to be a massive amount of paperwork.

________________________________________

Bonnie Lee is an Enrolled Agent admitted to practice and representing taxpayers in all 50 states at all levels within the IRS. She is also the author of Taxpertise: The Complete Book of Dirty Little Secrets and Hidden Deductions for Small Business the IRS Doesn't Want You to Know, from Entrepreneur Press.

Health care mandate unconstitutional - From NFIB

It's the time of year for fireworks, barbecues, pool parties and celebrating our nation's freedom. Because of what our forefathers fought for, the American dream of entrepreneurship, prosperity and limitless creative ambition has become a reality for so many people.


But this July 4 brings a harsher reality for Americans as one of our most core freedoms hangs in the balance: the freedom from the government to force citizens to buy a certain product or participate in any one part of commerce.

Three months ago, Congress passed and President Obama signed the health care bill into law. The nation needed health care reform, but this law was not the way to do it. In fact, this law is unconstitutional.

The health care law infringes on every American's right to purchase what they please, including health insurance plans. The law forces Americans to buy health insurance, whether they want to or not, or face a penalty in the form of a fine. Our nation was not founded upon a government that forces its own citizens to purchase something against their will or face a penalty.

Maybe being forced to purchase health insurance doesn't sound so bad to you. But what about if the government forces you to buy vitamins or join a gym, or says we can't eat our barbecue on July 4 because it's unhealthy? If the courts uphold the health care law, there is no limit to what the government will be able to mandate Americans purchase.

This law is not only detrimental to our freedoms but also to our businesses, particularly infringing on small business owners' abilities to manage the day-to-day operations of running their operations. The individual and employer mandates combined with the onslaught of new taxes, paperwork requirements and new rules will dramatically increase the cost of starting and running a small business. And while there are a few provisions that may benefit a limited number of small businesses, the overall effect of the law will do much more harm than good.

A law that harms small business harms the entire nation. Small businesses deserve better than a health care law that was rushed through the legislative process, ignored the Constitution and ultimately will destroy jobs and force some small businesses to close their doors. Along with 20 states, the National Federation of Independent Business is fighting to overturn this legislation and protect our nation's freedoms through a lawsuit against the health care law.

Mandates from a central government authority that forced the people to behave or act in certain ways were exactly what we won our independence from more than 200 years ago. Let's not go back.

Julia Ciarlo Hammond, state director, National Federation of Independent Business, Richmond

Marketing with Social Media

Social Networking

FacebookFacebook is an international social marketing technique originally adopted by teens to get to know one another. Using the Internet, Facebook provides a venue for sharing photos, information, news, and sales; it allows marketers to have an interactive Web presence with their existing clientele, as well as to encourage prospective customers to try their products. Consumers are encouraged to become "fans," post messages, and encourage their friends to become a friend of the fashion site. Nordstrom, Versace Couture, Chanel, and Saks Fifth Avenue use Facebook as a fashion marketing tool. It is an inexpensive, targeted, and highly effective method for reaching their primary target market.
Annabelle LaRoque"s private brand, LaRoque, has become extremely successful since its inception in 2005. In 2009, more than 1,000 custom-made designs were sold. What is so amazing about this figure is that the LaRoque brand is marketed solely by flyers, Facebook, and word of mouth. LaRoque says that Facebook has become the best marketing effort for her fashion house. Every design is featured on Facebook. The company receives at least five new orders through this medium every week. LaRoque and her customers e-mail each other, talk about fashions, and discuss new fabrics, styles, and designs - all through Facebook. Customers tell her when they are on their way to her store. Facebook "is amazing for my business," she says. "I change my profile picture every day. My picture is always one of my garments. I always tell people what I am doing at the store. Facebook provides a social relationship with my customers."

One of LaRoque's Facebook marketing efforts is the Rainy Day Sale. Any day it rains, the store has a 15-percent-off sale. Customers will log on to Facebook and e-mail Annabelle; they give her the weather forecast and a reminder that they will be in the store the next day. This marketing promotion instills loyal customer behavior and encourages the target market to continually look on Facebook for new ideas and additional contact with the owner, thereby instilling a sense of friendship.

Fashion marketers must always evaluate the success rate of any advertising strategy. As advertising dollars decrease, it is even more important to verify that every advertising strategy reaches its intended audience and that they retain the information. Retention is "a form of competitive advertising calculated to keep a product, services, industry, or view point in the public eye" (Ostrow & Smith, 1988 p. 207). Research on mobile advertising reveals that 40 percent of viewers recall mobile advertising. This recall level is very important in product advertising and encouraging purchase behavior (Ankeny, 2008).

Youtube

YouTube is a social marketing medium whereby videos, television commercials, and photos are posted on the Internet. Average YouTube viewers are 44 percent female and 56 percent male, between the ages of 12 to 17. The popularity of YouTube is widespread. Each month, more than 2.5 billion videos are watched (Woog, 2009). Its viewing frequency makes YouTube and excellent tool for the fashion marketing industry, and yet, despite the enormous number of consumers looking on YouTube on a daily basis, it would be a mistake to use this tool as your primary fashion marketing effort. And integrated fashion marketing effort remains vital to promote merchandise. Integrated efforts include a variety of marketing efforts that repeatedly demonstrate the fashion's benefits to consumers.
YouTube began as a social marketing tool among the younger target market. This marketing media is now used by a wide range of fashion companies. Companies are able to reach their stakeholder by posting television advertisements and fashion show. Designers use YouTube to continually build brand loyalty, market awareness, and product knowledge.

Fashion Marketing: Theory, Principles, and Practice

Mariaane C. Bickle

Pages 86-87

Fairchild Books

Copyright 2011