The new healthcare law now requires obtaining W-9 forms from any business another business does business with. It used to be, you’d get a W-9 from someone, like a one-time contractor, who you were going to pay more than $1000 in the calendar year.
Things have changed.
Nestled deep inside “Obamacare” is a requirement for ALL B2B transactions over $600 a year to require W-9/1099 filings. So, if a business anticipates buying more than $600 from Walmart this year, they first need to obtain a W-9 from Walmart. If a landlord has his rental’s mortgage with Wells Fargo (as I do), they have to obtain a W-9 from Wells Fargo. Etc.
I contacted Wells Fargo and was told, “Please be advised that we do not send out W-9 forms…”
Here’s an article on CNN about the new law…
I believe in honoring and sustaining the law. I also believe that if a law is bad law, good people should do all they can within the confines of the law, to change that law.
This is a BAD LAW. It is going to wreak havoc like you have never witnessed before unless it is struck down. Over 2000 pages of stuff like this that will only come back to damage our already weakened economy, as well as place a burden upon small and large businesses. And, when businesses are burdened, it means higher prices and lower employment.
Last night I met with a contractor for a quote. I told him if I decide to do business with him, I will need a W-9. He was totally unaware of this new law.
I could have kept my mouth shut, let him do the work, and then refused to pay him. (Not only would I have that right under the new law, but if I understand it, I would be breaking the law if I DID pay him.) I explained what I have learned about this and he said if that’s the case, they will have a W-9 ready for me.
It is stupid. Absolutely stupid that Congress would create such a bill, the Senate would approve it, and the president would sign it into law. I’m willing to bet that the majority of those who voted “yea” along with the president did not read the entire bill. I know my congressman did not, and he voted for it. His receptionist, when I asked if he was GOING to read it, did not answer yes or no, but only said, “Well, it is over 1000 pages.” (Which at that time it was. By the time the vote came around, it was over 2000 pages.)
Folks wake up. Stop voting for those who are so entrenched in Washington politics that they have lost sight of what over-regulation and stupid laws do to the citizens. Go to thomas.gov and look at incumbent voting records, and see how some of these yo-yos vote. (I call them yo-yos because they vacillate up and down with the trend of the polls.)
Let’s talk about driving bad behavior…
I once thought it would be a good idea to time my employees on trouble calls. One of the old-timers who worked for me at the time, pulled me aside and said, “You don’t want to do this.”
I asked him why. He went on to explain that it won’t speed up fixing the problem, but it will speed up how fast someone gets cut off when on the phone. He was speaking from years of experience and said when you judge people in customer support by how quickly the can end a phone call, they do things to end the call quickly – whether the call is over or not.
“Oh, I’m sorry. We must have got cut off,” says the service representative to the customer calling back.
In reality, that service representative hung up just seconds before the quote time limit.
How does this relate to this tax law?
Supposed you are a general contractor. All of a sudden, people only hire you for jobs that are $599 and less. Why? Because they do not want to hassle with W-9 and 1099 forms. They will start hiring contractors to do $599 jobs. So, you’ll get a lot of $599 jobs, and many will be following behind some other contractor who started the job and didn’t finish it because the customer wanted to keep the job under $600.
Another bad behavior will be, “Hey, I’ll make you a deal. Rather than charging you $5000 for this job, I’ll only charge you $4500 if we skip this W-9 and 1099 stuff. Okay?”
“Sorry, I only accept cash,” will be more common as cash-under-the-table deals spring up.
Forget about asking for a receipt. They don’t want any paper trail that could lead to a W-9/1099 filing.
It is a stupid law and needs to be repealed. So, get the word out. Write your congressman. Write your senator (and tell your senator if a repeal comes their way, you expect them to support the repeal.) And, when businesses complain tell them, “I’m just trying to abide by the law. If you don’t like the law, write your congressman.”