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Many businesses are familiar with the method of reporting payments to independent contractors to the IRS.  Request a W-9 form from the contractor, keep track of how much you pay them, and any contractor who receives more than $600 in a year gets a 1099-MISC form from the company.  Easy, right?

Now imagine you have to apply that $600/year threshold to everyone you pay, including vendors, suppliers, and service providers.  Ridiculous, huh?

Unfortunately, it may become reality.  According to a small section on page 737 of the new healthcare bill, companies will have to start issuing 1099 forms to any vendor who receives more than $600 a year starting in 2012.  This includes goods AND services.  Stop and think about how many of your vendors would be included. “Hi, Apple, this is Gina.  Can I get a W-9 form from you?  And OfficeMax, and Costco, and Verizon, and Best Buy…”

See, this is what happens when a bunch of lawyers sign off on something they didn’t bother to read.  Damn lawyers, anyway.

One person in Congress has avoided the Kool-Aid.  Republican Representative Dan Lungren from California is trying to get this provision withdrawn.  Let’s keep our fingers crossed he’s successful.

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