Buy A Franchise – New IRS 1099 Reporting

October 7th, 2010

(Buy A Franchise, Seattle Franchise, Bellevue Franchise)

New 1009 Reporting Requirements to Impact Franchise Businesses

On Wednesday, the International Franchise Association called for the repeal of expanded reporting requirements for small businesses enacted as part of the health care reform bill in comments submitted to the Internal Revenue Service.
 
“The immense scope of this new information reporting requirement will undoubtedly impact the operations of small franchised businesses and lead to serious unintended consequences,” said International Franchise Association’s  Senior Vice President of Government Relations & Public Policy David French.  “The proposed rules are very broad and afford no opportunity to minimize the burden of these requirements. Therefore, the IFA strongly believes that the only solution for franchise business owners is to repeal these new reporting requirements before they are scheduled to go into effect.”

Under the new health care law, The Patient Protection and Affordable Care Act, beginning in 2012, businesses must report all transactions that involve property and services, and which aggregate more than $600 in a year.  These transactions will trigger the requirement to file a Form 1099 with the IRS and furnish taxpayer identification numbers (TINs) for the businesses and persons involved.  Currently, businesses are only required to file Form 1099 for independent contractors they use in their businesses.  The new rules expand the requirements to cover all goods and services purchased for the business.

The International Franchise Association says that with the amount of new information the IRS will receive, small businesses are likely to face a heightened level of scrutiny from IRS examiners.

(Buy A Franchise, Seattle Franchise, Bellevue Franchise)

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