I had originally included this in my weekly gold and silver market wrap up. But I have received so many emails from alarmed readers about the topic that I thought it would be useful to give it a separate blog entry that is linkable, so it would be easier to answer those who express concern.
Those who originally raised this issue of a change in the law stated it rightly, but since then it has been fanned into a falsehood and a bogeyman, far beyond the proportions of its original scope and intent.
It is true that transactions in gold and silver and more particularly rare coins were exempt from 1099 reporting under the previous 1099 MISC rules. But they were always reportable and taxable on one's tax returns. Goods were exempts, but services were not exempt from 1099 MISC reporting and the thresh hold for them was $600. This law primarily applied to the self-employed and small businesses.
The change in the law removed the exemption for all goods, and not just for gold and silver and rare coins and collectibles, which are a small if not minuscule percentage of all commercial business transactions in goods and services.
It is well and good to remain vigilant to encroachments of the government on the rights of individuals and of private property. But one must also be on guard against becoming an unthinking member of a mob, reacting to those who would play on their emotions for their own ends.
Insidious men will use any issue, any crisis, any emotion, and turn it to their devious intentions. The central bankers and politicians began selling and leasing gold and property that did not belong to them but to their people, on the principle that controlling the price and the markets was a necessary instrument, a tenet, in their financial engineering, according to the counsel of their well-credentialed advisors. This was turned to the profit of the few, the financiers, and took on a life of its own, and became a looting of public wealth, and an abuse of property. Before it ends these abuses may become more egregious and widespread. It is no vain effort then to be on guard against them.
And as for us in times of official deceit and the abuses of the few, we must therefore hold even more firmly to the truth, and make every effort to find it, or risk being swept away in the swell of retribution and the restoration of justice that may turn to madness unbidden.
The Change in 1099 Reporting Requirements in Section 9066 of the Health Care Bill Does NOT Target Gold and Silver
On another matter, there is some misinformation creating concern, bordering almost on mild hysteria at times, about a change that was made in the Health care Bill Section 9066 regarding the reporting of sales of over $600.
There are those who say that the purpose of this law is to track the sale of gold and silver.
A decent discussion of the change is the law is available here and here.
The change in the law does NOT 'target the sale of gold and silver.'
I don't like the provision and think it was written badly, generating senseless paperwork for small businesses in a desire to make more business to business transactions subject to 1099 MISC for purposes of income reporting. I suspect and would hope that the interpretation of this law and its requirements will clarify the issues. If this change in the requirements includes what are essentially retail transactions then it is very badly written indeed.
But the point I wish to make here, and I want to be very clear on this, is that this change in the law is NOT specifically targeting gold and silver sales. It is targeting unreported income from transactions of any sort, the vast majority of which are no more sinister than common supplies, computers, and routine business goods. And coin sales in particular may be affected, along with quite a few other things.
Some might correctly say that this provision targets 'cash businesses' where income is easily hidden and unreported. So if one has been cheating on their taxes and hiding income, this change in the rules will most likely be an inconvenience. There are other more substantial issues with the burden placed on small businesses and the need to generate 1099's.
But this does not specifically target the sale of gold and silver, the income from which has always been taxable, and reportable.
The reporting requirement seems to have an unusually low thresh hold. This is has it has always been, it is primarily the exclusion for goods that has been eliminated.
I do not imagine that the IRS wishes to be inundated with useless mountains of 1099's. I do not believe they even have the capability of processing them effectively.
And I have to wonder why the Democrats slipped this change into the health care bill essentially chasing small loopholes for what is really small change, 20 billions over ten years, when there are so many large loopholes yawning wide open for the use of their corporate benefactors and the super wealthy.
Yes, that was a rhetorical question. The wealthy, who sit contentedly, fat on the spoils of their deceptions, and their bought politicians and judges, still greedy for more to be squeezed from the many, should well bear in mind the consquences of their perversion of the law in these wise words from the American revolution: "When the rich plunder the poor of his rights, it becomes an example for the poor to plunder the rich of his property, for the rights of the one are as much property to him as wealth is property to the other, and the little all is as dear as the much.
It is only by setting out on just principles that men are trained to be just to each other; and it will always be found, that when the rich protect the rights of the poor, the poor will protect the property of the rich. But the guarantee, to be effectual, must be parliamentarily reciprocal."
Thomas Paine
