Freedom Line Blog

Never underestimate the power of positive thinking.  With a level of spin only a well-heeled campaign operative could rival the IRS is trying to allay small business owners’ fears of an “avalanche” of new1099 reporting requirements that life under the new rules won’t be so bad.

With an assist from CNN, here’s IRS Commissioner Douglas Shulman’s attempt to slather lipstick on a pig:

The IRS will have broad leeway to interpret the rules — and it’s already showing signs that it will look for ways to staunch the paperwork flood.

In a late May speech before the two payroll industry trade group, IRS Commissioner Douglas Shulman announced a major exception to the new rules: The IRS plans to exempt transactions made through credit and debit cards. A separate reporting requirement kicks in next year that will cover card transactions and help the IRS spot unreported payments made through those channels, “so there is no need for businesses to report them as well,” Shulman said. “Whenever a business uses a credit or debit card, there will be no new burden under the new law.”

Geez, Doug, I can’t tell you how much better I feel knowing that no matter when and where I swipe my business card I don’t have to report it because you already know about it.  What a relief!  Now that you can spot every single transaction I make, I’m sure the helpful agents at the IRS won’t hold it against me if I forget to include one of those payments on my tax return; right?

I mean, you’re trying to help small business owners by relentlessly monitoring all of our electronic transactions; aren’t you?  After all, you’ve got “broad leeway” in interpreting your new powers…

It’s April 15th – the date that millions of Americans who waited till the last possible day to file their tax forms with the IRS can wait no longer to feed the insatiable appetite of federal (and state) tax coffers.  If you are like most of us, you try to struggle through the filing yourself — coffee and documentation at the ready — ultimately giving up and hiring an accountant, a tax-filing firm or downloading an online program.  In any event, it is an annual chore.  A monumental pain.  And an expensive one, at that — especially if you get it wrong and end up owing penalties.  Well, guess what, fellow tax-payers?  You are not alone!

The Hill newspaper reports that “few members of Congress prepare their annual tax returns, instead relying on professional preparers…”  The article details how even Ways and Means Committee members — the very ones responsible for writing the tax code — need professional help to file their annual taxes. Of the 28 respondents, only one — Got that? One — Member of Congress said he did his returns by himself (and he was an accountant for 12 years).

During an interview on C-SPAN’s “Newsmakers” program back in January, IRS Commissioner Douglas Shulman announced that he doesn’t prepare his own tax returns either.  Why?  Because, at least in part, he finds the tax code to be “too complex” to prepare them himself.

If that is not a case for tax reform, we defy you to find a better one.