This article was originally printed in the latest issue of Numismatic News.
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The 1099 issue is changing the Industry Council for Tangible Assets.
Founded nearly 30 years ago to be the hobby’s eyes and ears in Washington, D.C., ICTA is on the verge of changing its image from passive monitoring to active engagement in political fisticuffs – some say hand-to-hand combat – in trying to overturn legislation that many consider devastating to the rare coin field. It’s also moving ahead as a proponent of other measures.
A provision recently added to the tax law creates an obligation to issue 1099K forms, reporting to the IRS certain purchases and sales by corporations, individuals and proprietorships starting Jan. 1, 2012. Proponents of change said the measure would have a significant impact on the way people collect and invest in coins.
The aim of the legal requirement was to tighten “voluntary” reporting by corporations of income sources that the IRS claimed were being under-reported. At the present time, the Internal Revenue Code provides that if an individual earns more than $600 from work as an “independent contractor,” they receive a 1099 form that is also copied to the IRS.
ICTA’s board of directors opposes the reporting requirement on sale proceeds to the IRS, because the report does not pick up taxes that are due, merely that funds have been received. The theory: it’s as if every time you went to an ATM to get a $20 bill that a report went to Uncle Sam. No tax is due; just a report, but what a pain.
Congress debated repealing the measure this past September, but the measure was filibustered by both parties.
On Nov. 16, Sen. Max Baucus, D-Mont., chairman of the Senate Finance Committee, said he would seek to repeal it.
ICTA, its lobbyists, and some of its senior members had all moved toward claiming partial credit for the reversal. A number of other groups also pushed for this action.
Congressional Democrats had the stuffings kicked out of them in the Nov. 2 elections, and one of the reasons was the 1099 issue. More than 60 seats changed hands, knocking out several committee chairmen, and ICTA’s lobbyists and many others pounced.
As part of a general strategy of heightening awareness and involvement, ICTA is pushing to the wall the need to make this change. There are some other items on their agenda, including addressing the issue of favorable capital gains treatment for collectibles.
Baucus is now moving aggressively, taking advantage of Senate rules that allow liberal additions to measures being debated on the floor, by proposing an amendment to the unrelated (but scheduled for an early December vote) FDA Food Safety Modernization Act. The text would roll back the scheduled rules requiring corporations to file Form 1099 for payments above $600.
Also in November, Baucus introduced the Small Business Paperwork Relief Act (S. 3946), which would also repeal the provision.
Also on ICTA’s radar: H.R. 6166, The American Eagle Palladium Coin Act, which passed the House of Representatives in the fall. The Senate Banking Committee discharged consideration of the measure; by considering the House version, it short stops the process and avoids a Senate-House conference. More than likely, that means there will be a new bullion coin next year.