By ROBERT KYLE
Antique Week Correspondent

On the face of it there appears to be no connection between the antiques profession and President Obama’s new health care law. But then someone discovered Section 9006, “Expansion of Information Reporting Requirements.” It amended Section 6041 of the Internal Revenue Code.

That section of the IRS code says employers who hire temporary or freelance workers must send them a 1099-MISC form in January if they were paid wages of $600 or more. This is nothing new; it has been standard for many years.
The amendment, however, would require that businesses file the forms to the IRS for every vendor with which they have at least $600 in transactions not just wages. These vendors would provide their names, address and tax or social security numbers. The law is set to take effect on Jan. 1 2012. However, a repeal of the provision is in the works.

According to the Feb. 4 issue of the Numismatic Update, an e-mail newsletter distributed by Krause Publications, a “bipartisan bill in the Senate that would repeal the unpopular 1099 provision in the health care law garnered 60 co-sponsors on Jan. 27, giving the legislation its best chance at passage so far.
“Since Sens. Joe Manchin, (D-W.Va.), and Mike Johanns, (R-Neb.), introduced the bill, lawmakers have quickly signed onto the measure, which would eliminate the requirement that businesses file the forms to the IRS for every vendor with which they have at least $600 in transactions.

“Johanns failed twice last year to push through a bill, even though Democrats, Republicans and the White House agreed that the provisions would place an ‘onerous burden’ on businesses.

According to the newsletter, President Obama mentioned the legislation in his State of the Union Address saying, “We can start right now by correcting a flaw in the legislation that has placed an unnecessary bookkeeping burden on small businesses.”

The antiques trade would be adversely affected if the am-endment stands.
An auctioneer who sold $600 or more for a consignor would send them a 1099. The recipient would attach the 1099 with his tax return, adding it as income even if it was not. If the auctioneer charged the consignor $600 or more commission during a year, the auctioneer would get a 1099 for his services.
eBay sellers who claim their online income and who paid at least $600 in listing and final value fees per year would send eBay a 1099 for the selling service they provide. If Paypal charged $600 or more in collection fees, sellers would send them a 1099 as well.

“This is unfair to our consignors because they have already paid taxes on that merchandise once, and it will hurt the auction,” said Mark Ankney of Double A Auctions in Rector, Pa., a member of that state’s auctioneer association.
Matt Grossman, writing in The Stock Enthusiast website about the impact on antiques shopping, said, “Imagine you and your spouse go antiquing one summer afternoon and find a painting that would look great in your living room.
“The price of the painting is $600. You are happy to pay that price for such an exquisite piece until the dealer asks for your name, date of birth, address, and social security number … I don’t know about you, but I don’t want to give my social security number to a complete stranger … A major concern is that identify theft could run rampant.”

The Pennsylvania Auctioneers Assoc. said it was not aware of the new 1099 law until late October.

Jeanie Crowl, the PAA administrator, said e-mail alerts were sent to all members. In a response, Auctioneer Phil Grosh, of the Jennings Group in York Haven, Pa., wrote: “The National Auctioneers Assoc. is actively working with a number of other business groups from around the country to see that this provision is rescinded before the implementation date.”

That NAA placed full-page ads in newsletters of some state auctioneer organizations.

They urged members to “take action now” by writing members of Congress and Senate.

“The auction industry consists mainly of small businesses, many family-owned and operated,” stated the NAA. “These small businesses cannot afford the increased costs associated with collecting, filing and tracking paperwork for every transaction they make that exceeds $600.”

The Wall Street Journal has been a vocal critic. A Feb. 5 opinion piece entitled, “The 1099 Repudiation, A Revealing Debate Over One of Washington’s Dumbest Ideas,” said: “Democrats now claim that the infamous 1099 business reporting mandate that the Senate repealed this week was an accident, as if they were as surprised as anyone else to learn that this destructive provision had crept by itself into law.”

The article said the law “would result in a vast new paperwork and accounting burden for 30 million businesses and hit start-ups the hardest, not to mention farms, charities and churches.”