Irs Gears Up To Business-to-business Information Reporting Requirement

While an excise tax on tanning services was the first health care reform revenue

raiser to hit the books, the Patient Protection and Affordable Care Act of 2010 also includes new Sec 6041 requirements with respect to reporting of payments made in the course of a payer's trade or business.

For those of you running to your trusty copy of the IRC, Sec 6041 generally requires information returns to be made by every person (payer) engaged in a trade or business who makes payments (as defined in Sec 6041(a)) in the course of the payer's trade or business that are in aggregate $600 or more to another person. Broadly, the new requirements (as reported in E@lert earlier this year) expand Sec 6041 information reporting requirements to apply to payments made to corporations and to include certain payments of gross proceeds with respect to property.

In order to provide guidance for the new law, which applies to payments made after December 31, 2011, IRS issued Notice 2010-51 requesting public input. While it proposed regs exempting payment of credit card purchases otherwise reportable under Sec 6050W, the Service did not issue proposed regs for the entire new law; instead opting for an approach that allows more flexibility. The notice allows for a 90-day comment period closing on September 29, 2010.

While the National Association of Enrolled Agents will be providing comments on behalf of the enrolled agent community, individual EAs are also welcome to provide individual comments. Should you be interested in providing comments, IRS has posted the following instructions on its website illustrating three methods of submission:

Email comments to: Notice.Comments@irscounsel.treas.gov. Include "Notice 2010-51" in the subject line. Mail comments to: Internal Revenue Service, CC:PA:LPD:PR ( Notice 2010-51), Room 5203, P.O. Box 7604, Ben Franklin Station, Washington, DC 20044. Hand deliver comments to: CC:PA:LPD:PR ( Notice 2010-51), Courier's Desk, Internal Revenue Service, 1111 Constitution Avenue NW, Washington, DC, between 8 a.m. and 4 p.m., Monday through Friday.

Also, the government relations team would be interested in receiving a copy of your comments. Please copy them at governmentrelations@naea.org. One suggestion, your response will be most effective if you focus on two things: the five specific questions on page four of the notice and real world examples. IRS attorneys, by and large, do not have the wealth of practical experience that enrolled agents have and that's why the real world examples are so welcome.

by: Jim Rizzolo

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