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ICTA enters fight

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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.

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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.

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