New law creates IRS paperwork for rental owners | Washington Examiner: "According to the bill's proposed new rules on rental property, owners who pay $600 or more for a service such as plumbing, landscaping or painting, would be required to issue 1099 forms to the IRS and whoever provided the work.
'Under the provision, recipients of rental income from real estate generally are subject to the same information reporting requirements as taxpayers engaged in a trade or business,' the JCT reported.
The new rental reporting requirements would go into effect on Dec. 31 this year and would likely affect millions of property owners, say taxpayer advocates.
'You've got to be kidding me,' said Tom Schatz, president of the watchdog group Citizens Against Government Waste, when told about the provision. 'Honestly, it's an outrageous burden for rental owners.'"
The higher penalties called for in the bill, which would apply not just to rental income transactions but any person who files a 1099 form, would take effect on Jan. 1, 2011.
Fines would double for each 1099 form someone fails to send to the IRS, increasing to $60 for individuals and $250 for small businesses.
The maximum fine the IRS could impose overall on small businesses for not sending in the information would double or triple, increasing to as much as $250,000.
