Tuesday, December 7, 2010

New Rules: You And The IRS This January

Dees Illustration
David Nguyen
Activist Post

The new ObamaCare1099 rule for reporting of all cash, credit and check business transactions of $600 or more is scheduled to begin January of 2012.  This is really an extension of the 2008 Housing and Recovery Act IRS rules that start this January when merchant banks and PayPal will report business sales directly to the IRS (the reporting threshold is $20,000 and 200 transactions a year).

These new IRS rules will affect every American:

• Income tax collection could rise as much as $345 billion a year
• Small businesses will be crushed and unemployment will rise
• A cashless economy is further set in motion
• IRS snooping and audits will increase
• Gold can be tracked
• Identity theft is a risk
• Government surveillance will increase


ObamaCare requires that businesses and self-employed individuals submit 1099 forms to the IRS for all business purchases of $600 or more.  The stated purpose for this is to close the 'tax gap' which is the difference between the amount of what is "owed" and what is paid, due to lack of reporting and under-reporting, and is estimated at $300 billion dollars a year.  Last week, the Senate failed to repeal the ObamaCare 1099 rule because they could not agree on how to make up the "lost" revenue that would be generated from strict reporting, which they estimated to be $19 billion over 10 years, which is a GROSS underestimate.

A document from the Senate Committee on Finance in 2009 states that the intention is to close the tax gap (estimated at $345 billion here).  If the IRS is 100% successful, they will collect $345 billion a year in extra tax money. 

The key issues are under-reporting and non-reporting, so the government's remedy is to require voluminous detailed record keeping and reporting by businesses and private contractors.  They want to monitor how much each business brings in and how much they spend, almost down to the penny (or $600 anyway). 

According to the Senate document, the IRS targets businesses with assets under $10 million for the 1099-MISC forms, as they found that only 8% of them file the forms. The IRS expects the so-called "voluntary" income reporting rate to jump from the current 46% to 95%. This means that the IRS aims to collect $345 billion a year by requiring mountains of detailed paperwork from businesses and independent freelancers.  Individual filers are also targeted by the IRS. Traditionally, the IRS 1099-MISC form has been used primarily to report independent contractor income (a service), but it now includes the sales of goods totaling $600 or more in course of business.

The purchaser or buyer is responsible for issuing 1099 forms for all business transactions. However, this rule applies only to business exchanges, so individuals will be spared from collecting 1099 forms from grocery stores, for example, if the purchases are for personal use and outside of business.

The new measure is reported to have been waiting in the wings for the right opportunity and now that it is law, and with so much money on the line, it will be almost impossible to repeal.  Even if it was repealed, the Housing Recovery Act, a companion to ObamaCare tax laws, goes into effect January 2011.


Originally, the 2008 Housing Act required merchant banks and third party processors to report volume business sales of $600 or more to the IRS, but PayPal pressured Congress into raising the reporting threshold to 200 credit transactions and payments over $20,000 a year. Any business that uses a merchant bank account or third party network like PayPal with 200 credit transactions and sales of $20,000 or more needs to keep meticulous records because their financial data will be sent directly to the IRS. This begins January 2011. 

This new provision will allow the IRS to supervise credit and debit payment streams that were formerly difficult to track.  In the past, the IRS needed a subpoena from a judge to get information from merchant accounts.  Now the IRS can spy on merchant accounts and audit without notice.  Further, the IRS can guesstimate cash sales based on credit sales and compare those to similar businesses. If the IRS deems the cash sales as being too low, it could trigger an IRS inquiry or audit.

Because merchant banks and third party processors will send data directly to the IRS, they will have access to information not only on the sellers, but also the BUYERS!  The volume aggregate sales will be sent directly to the IRS, but records of individual sales will be stored as back up data so the IRS may have access to individual buyer information.

Taxation is a function of government, but now banks and third party processors are part of the equation. Identity theft is a risk for self employed individuals and small businesses that use their Social Security numbers as Tax ID numbers with the new bank tracking system.


Close to 60% of Americans oppose ObamaCare and the new 1099 reporting is a way to offset the cost.  While the IRS contends that this is not a new tax, it can be argued that it is new because of the 1099 reporting now includes of sales of goods.  Even if some States, businesses and individuals reject ObamaCare and want to opt-out, the taxpayer is still stuck paying the bill.

The IRS is the enforcer of ObamaCare. The IRS has the power steal money from bank accounts, garnish wages, put people in jail and some IRS agents carry guns.

ObamaCare reinstates the original $600 credit sales reporting rules of the 2008 Housing Bill and massively expands it by mandating that EVERY business transaction of $600 or more, whether it is cash, check, credit, or any other thing used for payment, to be reported to the IRS with 1099 forms.

For example, if a freelancer buys more than $600 dollars worth of office supplies over the course of a year from Staples, the individual will be required to 1099 Staples and to collect their Tax ID Number.

Additionally, small businesses and self-employed individuals will receive a 1099 form from each business that they sold over $600 worth of goods or services and will have to supply their Tax ID or Social Security Number to the purchaser.

Doug Shulman, IRS Commissioner, said that credit card and debit card purchases will be exempt from reporting with the 1099 forms because payment processors will already be reporting the transactions to the IRS. Under the guise of eliminating the burden of paperwork for small businesses and independents, this is really a step toward a cashless economy because people will want to avoid the extra paperwork and will embrace electronic transactions.

PayPal stands to benefit tremendously from a cashless economy and increased use. 

Imagine a cashless economy where the banks are in charge of access to your money.  Recently, the National Australia Bank's had a computer glitch that left millions of people unable to get their own money.  Do the bankers really need any more power?

Cost of ruining small business.........$600
Cost of government stupidity.........Trillions
Dreams of the American people waking up and taking action..............Priceless
For everything else, there's MasterCard


Gold and other precious metals will also be subject to the new rules, enabling the IRS to track gold ownership. Currently, gold is easy to transfer without tax because its value is intrinsic, or contained within the item itself.

According to the ObamaCare mandate, when precious metal dealers buy jewelry, coins or bullion from businesses or individuals they will be required to submit a 1099 form with Tax ID numbers or Social Security numbers from the sellers, which includes private individuals.


The government has expanded the power of the IRS in order to collect revenue that could be as high as $345 billion in taxes a year. The IRS is expected to add 16,500 new auditors, examiners and support staff. In 2009, the IRS employed over 93,000 people which includes 50,000 employees that work in the IRS examination, collection and investigation fields. The IRS spent only 50 cents for every $100 it collected.

In 2009, about 150 million income tax returns were filed and over 70 million people, or 42%, owed no income tax due to tax credits, deductions and exemptions, which are forms of welfare.

It is estimated that up to 30 million people do not file income tax returns at all. About 10 million of these people have paper trails following them because they receive W-2 or 1099 forms. The other 20 million deal in cash, have no records for wages or pensions or are affluent non-filers. However, failure to file a tax return can be like playing Russian roulette; while the current IRS audit rate is only about 1%, that number will increase with the addition of the 16,500 new agents.


According to "The Great American Tax Dodge", the IRS is far more apt to go after middle-income non-filers and does not fully investigate affluent non-filers. The IRS uses the lame excuse that the rich may under-state the taxes owed and that the IRS would prefer nothing over under-stated taxes. It is more likely that the IRS avoids investigating the rich because they have resources to oppose the IRS.  The IRS is more apt to harass middle income earners who pay fines easily without a fight.

In 2009, small businesses employed half (60 million) of private sector non-agricultural workers; 15.5 million of those were self employed individuals. The IRS collected $1.36 TRILLION from individuals and $395 billion from corporations in 2007.

Most large American corporations like GE, Exxon, Google, MicroSoft and Berkshire Hathaway that have international operations pay very little or no taxes at all. This is accomplished by routing money through foreign countries with different tax laws and other loopholes.

While this may anger people, it is important to remember that corporations pass taxation costs on to the consumer, so the people buying the products bankroll corporate taxes.


The left/right paradigm is an illusion: Bush's Housing Bill of 2008 and ObamaCare are companions.  It is worth noting that both parties work together to accomplish the same agenda.  In this case, it is total financial control, pressuring the middle class for hundreds of billions of dollars more in taxes and moving toward an electronic-based economy that shuns cash.  This is a very important point because people must give up this illusion in order to elect Constitutional leaders.

Many struggling small businesses will be crushed underneath the pressure of painstaking record-keeping, productivity loss and increased taxes. Failure of small businesses will create more unemployment. More unemployment will result in more welfare and reliance on the government. The government will then want more tax money.

The best way to cut the Gordian Knot is a clean sweep of these complicated and unfair laws.


When filing your return, be sure to use approved online tax software.

Right now, individuals have the choice to protect their assets and privacy by turning away from credit and debit cards and trading in cash, precious metals and barter.  This would also bolster local economies.

The simplest way to get rid of ObamaCare is to forgo the lengthy repeal and litigation processes. The States can nullify this new law even before it goes into effect. If enough States nullify ObamaCare, it becomes invalid.

The 10th Amendment Center has written nullification legislation to get rid of ObamaCare.

The Corporate Excise Tax of 1909 is a separate animal from the 16th Amendment income tax established in 1913.  The cleanest way to eliminate IRS tyranny is for the States to nullify the 16th Amendment because it opposes the Constitution- it is a direct tax that fails uniform application.

The most accessible power lies with the States, so it is crucial to support Constitutional leaders who will apply the Tenth Amendment.


This article may be re-posted in full with attribution.


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Anonymous said...

Thanks for the detailed report! Great information.

Anonymous said...


Has everybody suddenly developed memory problems? The 4th Amendment to the Constitution specifically PROHIBITS this type of activity. The government knows this of course. Without a warrant the government CAN NOT view your personal papers. The IRS is NOT above the Constitution people. No matter how hard the government tries this is still flat out illegal.

Anonymous said...

WELL, reads like a NIGHT_MARE. Tyrany on the run.
Life and death.OPPOSE DEATH, and run for your life. Moving out of this prison country.Thank you for the info. Bloody revolution is coming.

Anonymous said...

"Obamacare" isn't the problem. People get sick and it's a crap shoot when and how. Just deal with it and pray it's not you. Why is it that the U.S. is the only industrial nation that can't "afford" basic health care? Hell, even Cuba manages better than we do! Instead of nationalizing health care, we train more homeland security airport perverts. Instead of developing a renewable energy infrastructure, we make B2 bombers which pound-for-pound would be cheaper if they were made out of solid gold! Our priorities have been really screwy for years since the Reagan revolution and we're all going to pay a helava price for our ignorance. All those tax breaks for the rich over the years have been very expensive. So, pay up bud!

James Stuart Sinclair said...

If the society you have becomes intolerable, you are not compelled to maintain allegiance to it. Simply create a new one, as we are beginning to do at http://www.gaienecommunion.org , and withdraw your allegiance to the old. Without your active consent, tyranny withers on the vine.

Naraya said...

Learn to live without the money. Change the purpose of your lives & your economies so that it doesn't revolve around the sick greedy capitalistic game of wealth acquisition. For if the world around isn't worth a penny, what good is the money anyway?

Or maybe the world needs to get to that point first? Does it really have to be that way?

This path leads to a chaos that you don't know.

Anonymous said...

What a rouse!
ObamaCare, what a health plan!
To keep the banker thieves healthy, the IRS steal ALL our money....legally!

Nullification by the States is the only thing that can save us! The Federal Government is over the top now.

Obama is an illegal president because he is not an American Citizen....until this point is realized, his treason and that of Congress, will continue to destroy America!

PhilJohnson said...

Obamacare is the problem. It does nothing besides insure that insurers will make more profit and does nothing to address the real problem with healthcare. The cost of the care itself is way out of line with what most people can afford. If it looks like a bubble and talks like a bubble it is. Healthcare cost can't keep ballooning out of control every single year and not pop.

Anonymous said...

For those who quote the Constitution and that which is supposed to apply, forget it. The alleged statement by GW Bush that the Constitution is a GD piece of paper is how these people think. And do you really think enough states will nullify the 16th Amendment or do so in time?

Anonymous said...


Perfect from After The Fire

Load it in your browser PDQ...the long version. Just like the IRS is still the too long version!

Crocodiles are near impossible to stop swimming!

MK Indiana

Anonymous said...

True. I work for a credit card processor used by people who want to be able to accept credit cards for their business. Our system has already been updated. We have TIN on the merchant screen, (tax id #). If this # doesn't match their fed tax id# it is red. This will be linked to every processing transaction. So, basically this is tied to their account. So, the IRS will know every transaction. We had to create a position IRS/fed tax person. So the IRS will know "exactly" what your business has generated from credit card transactions.

Anonymous said...

What I don't understand is why we as a group of Americans with rights from the constitution don't say NO WAY to these tyrannies. Someone started the opt out day for the airlines and that scared them. If everyone got together an organized no way to this and obamacare them we are on to something. We let 600 rich egomaniacs gone wild make these rules for us, but not them???? Come on fellow Americans!!!!!

Anonymous said...

You're all looking in the wrong place for solutions. Our govt was co-opted by criminal politicians - face the facts - they are the ones who passed all the laws against our constitution, and they are the ones who need to be taken out. Read the Declaration of Independence. It says when our govt becomes tyrannical, its the right of the people to remove them. It can't be done by voting because they own the companies that make the voting machines and they can program them how they wish. So what does that leave us with - the barrel of a gun, and thats what it will come down to.

Anonymous said...

For you Americans, your government does not, will not, operate under the constitution.
Everything, your government does, is outside, of your constitution. Constitution has been suspended along ago.
Smoking mirros.

Anonymous said...


Anonymous said...

>The Ghost of Valley Forge>

I had a dream the other night, I did not understand; about a figure walking through the mist with a flintlock in his hand. His clothes were torn and dirty and as he stood there by my bed, he took off his three-cornered hat and speaking low he said:>>We fought a revolution to secure our liberty. We wrote the Constitution as a shield from tyranny. For future generations this legacy we gave, for this land of the free, and the home of the brave.>>The freedom we secured for you we hoped you'd always keep; but the tyrants labored endlessly while your parents were asleep. Your freedom gone, your courage lost, you're no more than a slave; in this land of the free, and the home of the brave.>>You buy permits to travel and permits to own a gun, permits to start a business or a place to build one from. On land you believe you own, you pay a yearly rent; although you have no voice in choosing how the money's spent. Your children must attend a school that doesn't educate; your moral values can't be taught, according to the state. You read about the current news in a very biased press; you pay a tax you do not owe, to please the IRS. Your money is no longer made of silver or of gold, you trade your wealth for paper, so life can be controlled. You pay for crimes that turn our nation from God to shame; you've taken Satan's number as you traded in your name.>>You've given government control to those who do you harm; so they can padlock churches, and steal the family farm; and keep our country deep in debt, putting men of God in jail, harass your fellow countrymen while corrupted courts prevail. Your public servants don't uphold the solumn oath they've sworn, your daughters visit doctors so children won't be born. Your leaders ship artillery and guns to foreign shores; and send your sons to slaughter, fighting other peoples wars.>>Can you regain your freedom for which you fought and died, or don't you have the courage, or the faith to stand with pride? Are there no more values for which you'll fight to save, or do you wish your children live in fear and be a slave?>>Sons of the Republic arise and take a stand; defend the Constitution, the supreme law of the land. Preserve our Republic, and each God-given right, and pray to God to keep the torch of freedom burning bright.>>As I awoke he vanished from whence the mist he came; his words were true, we are not free, we have ourselves to blame. For even now as tyrants trample each God-given right; we only watch and tremble, too afraid to stand and fight.>>If he stood by your bedside, in a dream while you're asleep; and wonder what remains of your rights he fought to keep, what would be your answer as he called out from the grave, is this still the land of the free, and the home of the brave?

pod said...

The wages of a man is not income. See the Tom Cryer videos and visit truthattack.org. Income is profit after ALL expenses are deducted. Labour has a value and trading it for something else of equal value does not create profit.

Anonymous said...

A pound of flesh for payment !!!

Anonymous said...

This should help expand the underground economy. Don't use credit cards. Barter, use gold/silver or currency. When children are born, do not get them a SS number. Become subversive. Do everything you can to fuck up the corporate/government bitch.

Anonymous said...

Why does it say this January if the ObamaCare1099 rule doesn't take affect until 2012?

Anonymous said...

People need to learn how to say Hell NO! to these assholes.

The IRS and the BATF are rouge agencies put in place to steel from you at any cost.

Stop participating in there game. If they come to your door, give them a dirt nap.

Anonymous said...

"This is really an extension of the 2008 Housing and Recovery Act IRS rules that start this January when merchant banks and PayPal will report business sales directly to the IRS (the reporting threshold is $20,000 and 200 transactions a year)."

Anonymous said...

if we all stopped giving the irs our money paying them !! they would never have enough money , man power , or time to catch all of us this would create quite a problem. We really need to man up and do something before we all go broke and have nothing live on the street in that case they will really not get any thing because at that point there will be nothing to give so what difference is it going to make which way it happens .... it is time to step up and take contrl of our country back the government has got way to much control i fell violated.... dirt bags

Anonymous said...

More useless information from those who never saw this coming if there life depended on it and now they are the experts on what to do. There is already a bipartisan bill to repeal these silly acts. Give your gold? Now that is proof you know nothing at all.

Anonymous said...

People getting sick is a crap shoot? Ya right...it seems the odds are getting more and more against us as time goes on.
I don't mind socialized healthcare, it's when luciferians who love death want to control it that scares me. In fact, it's scary when the same types have control over anything. We have the government we deserve.

Anonymous said...

if you work for government you are an enemy within,look at history for thousands of years

Anonymous said...

Our government is so Santanic that we are doomed until the return of Christ to earth. These murdering jerks have killed trillions of men women and children over the last 100 years. And raped and molested many more. Evil so black we wouldn't beleave. Hate evil and love good. Pray every day that this will end soon.

Anonymous said...

^^Satanic? Your mind is stuck in the dark ages.

Anonymous said...

"we are doomed until the return of Christ to earth"

OH PLEASE - will you wake up! Stop waiting for an entity to "Return" to save your pansy ass, and get off your ass and do something.

No wonder this country / World is in such shit shape as people keep waiting for something or someone to save them.

Quite being so pussyfied and fight back by any means.

Anonymous said...

The author seems to be completely unaware of some things, such as:

The IRS is NOT a government agency, and has NO legal power to tax anybody, or make anybody conform to any of their illegal rules. The Internal Revenue code is not law, and neither is anything they put in their pamphlets, their returns, their instructions, etc., etc.

There is no law, including in the Federal Register, that makes private citizens legally liable for the payment of any federal income tax, or for filing federal tax returns.

The criminal syndicate in DC has no legal authority or legitimacy, because the CONstitution is just some unsigned pieces of paper. I defy anybody to prove to me that unsigned pieces of paper, written in a back room 220 years ago by men long since dead, can confer legal authority or legal obligations on anyone.

DC is a swamp of treasonous criminals, and everybody in it needs to be treated as such. These geriatric crooks can only get away with what people let them get away with.

That being said, however, the state legislatures are even worse, because they could have long ago passed legislation making all "federal" laws null and void and unenforceable within their borders. The fact that they haven't ought to tell you something.

Anonymous said...

The Constitution was writen for the people to understand the controls that they have Over the Government.

People seem to think (mistakenly) that the Constitution rules the people - Wrong.

It Rules the Government, and list only the powers that they have.

But in this country ignorance is bliss for 90%.

Joe said...

This type of illegal government behavior will no doubt continue, because the politicization of our judicial system is the laughing stock of the world. No one of any intelligence would deny that the peoples business is being subverted by those with only greed and power in mind. real justice is being trampled on and this IRS abuse is a prime example of no one and I do mean no one speaking for the rights of the nation, the people or the Constitution. No one means real trouble. This is why IRS abuse will continue until someone stops the money going to such organizations.

Anonymous said...

IRS laws were repealed long ago has everyone forgotten this and they were never re-instated even the 16th amendment is null and void.
Talk about a memory hole and yes your world religions are a scam and deception that has been proven so keep waiting for your jesus fraud or whoever and while your at it bend over for a cavity search oh yeah might want to call in your jesus fraud to save you NOT psych! where is he while your orifices are getting stretched out?! good luck! passivists who needs them! the great deception is world religions!!!

Anonymous said...

go sell that lie elsewhere your the deception not religion its leaches like you who have sucked the life out of this country with your secular lies. who are you going to suck from when the rich are gone whos gona pay for your free crap then? are you going to suck it out of the poor then like you socialists always do. its always somebody that you claim is opressing you when in fact its you who are doing the opresion. we are on to worms like you. this country is about to become very unwelcoming to you and your kind. you can go do your living and business in venezuela your not welcome here. we will turn the other cheek but only once. dont push your luck! there isnt enough of you to matter for very long.

Anonymous said...

^^"secular lies"

Sad that this site is starting to attract the nut jobs. Also note the "satanic government" post above. You guys are clueless.

Anonymous said...

Stop the Man you stop the movement...as Malcolm X stated---By any Means Necessary. He wants to hobble us as a nation and send the middle class into abject poverty. Are "Obamavilles" (see Hoovervilles) the next step in Uerban renewal?

Anonymous said...

It seems Hansel and Gretel are all nice and fat for the magical new year of profit for the few.

Anonymous said...

Rebel peacefully. Live in another country. pay less tax to a more benevolent despot overseas. America is toast anyway. Mass migration of the native population will cause the country to dissolve. There would be no common language or culture. No one would be able to communicate. I drift. That must be the master plan. Time for another cold one.

Anonymous said...

Thats right,time to move on to "freer soceities",The U.S. corp. is "broke" and all who work for the corp. are getting desperate.Better get your assets and loved ones out,times running out.

Winsmith said...

The death of cash? Since 1979, the fed has been telling us that their system "works only with credit" that would keep its value "if there were fewer people bidding against each other."

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