A recent post over at the American Society of Media Photographers provides some insight into how the new 1099 requirements for businesses (and freelancers) will create a surge of additional paperwork. While the post caters to photographers, this new law will effect all businesses and could potentially raise consumer prices to cover the additional administrative costs to file and send 1099 documents to every vendor paid over $600 per year.

ASMP provides a sample email that you can send in as a photographer, so we modified it so that it relates to Web developers. I highly suggest you and anyone you know contacts the IRS regarding this issue.

TO: Notice.comments@irscounsel.treas.gov

RE: Notice 2010-51

Dear Sir or Madam:

I am a Web developer and a small business person. I have virtually no administrative staff to handle my record-keeping and reporting responsibilities. The new requirement under Section 6041 of the Internal Revenue Code would place impossible burdens on me. While the credit card exemption certainly helps, it does not go far enough.

I often pay for server licenses, computer equipment, hosting, ISP bandwidth, advertising and other items by check. Those expenditures often total more than $600 per vendor in any given year. Having to keep separate track of each of these items — and then to issue Form 1099’s to each vendor — would simply take more time than I have as the owner of a very small business operation, and it would require back office support that I do not have and cannot afford.

Please change the requirements so that they apply only to larger business entities, such as persons or entities that employ more than 25 people.

Thank you for your time and understanding.