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July 10th, 2010 11:39 pm
IRS Assures Small Businesses that More Electronic Monitoring Means Less Paperwork

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…

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