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Agents brace for tax nightmare

IRS crackdown could be costly for real estate industry

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Courtesy of the health care reform bill, every business in the country is about to undergo a dramatic change in how expenses are reported. These changes promise to be an accounting nightmare for virtually everyone. A recent article in CNNMoney.com focuses on one provision of the health care bill. This simple change is designed to help close the estimated $300 billion gap between what individuals and businesses owe the Internal Revenue Service versus what they pay.What the provision doesn't address is the record-keeping and accounting costs that could far exceed the amount of revenue the bill will generate. The impact on the real estate industry could be profound. Traditional 1099 tax forms are the mechanism for reporting non-wage income that can include commissions, mortgage interest paid, pension distributions and dividend income. Brokers typically issue 1099s to those who do contract work for their business, most notably their sales staff. In 2008, Congress passed a new...