Businesses in the United States will have a new federal tax reporting requirement for 2012. All revenues earned through the sale of merchandise, goods, services and vendor supplies will have to be reported to the IRS. Companies will have to keep accurate records of income earned through these sales and send a Form 1099 to each company with whom they conducted business. This new legislation is part of the health care reform legislation passed in 2010. The idea behind this new reporting system is to catch those companies that do not report all of their large business transactions or reveal the total amount of their taxable income.The New Form 1099 RequirementBusinesses are required to send a Form 1099 to any company with whom they traded goods and services. If a company made a total of $20,000 in revenue from selling equipment to another entity the new law states that the reporting of these sales must be sent from the buyer to the recipient on a Form 1099. The Internal Revenue Service will therefore know what companies are doing business with each other and will have access to the monetary amounts. Any sales amounting to more than $600 must be reported.The Form 1099 will have a box that must be filled in with the total sales amount. Until this year corporations were exempt from this reporting law but now must also report earnings from vendors, private corporations and other businesses. The box checked will show how much the company or corporation took in as gross sales. The IRS has published several tax form instructions for filling out the 1099 properly and these can be found at the Department of Revenue website.Separate Form For Each Business PartnerCompanies must send a 1099 to each business with whom they purchased goods or services. This means accounting must be accurate and must separate the totals paid to each business. Many smaller companies are scrambling to reorganize their accounting departments and there has been much discussion about what would happen if thousands of small business were unable to comply with the new legislation. The federal government has stated that this new regulation will actually raise more than $15 billion over the next decade, but how the law is interpreted by the Department of Health and Human Services is unclear to many. HHS is in fact the overseer of the new legislation because the bill was part of the health care reform changes.