They say the definition of insanity is doing the same thing over and over again and expecting a different result.  If that's the case, Congress must be insane when it comes to increasing paperwork burdens on ordinary Americans--particularly paperwork of the 1099-MISC variety.

The Obamacare law has over two dozen tax hikes.  One of them is a new paperwork burden on small employers.  Basically, every small business in America will have to mail a tax form to every single entity they do business with.  That means every restaurant, every airline, every gas station, every supply store, etc.  The public erupted in opposition, and Congressional Democrats have promised to repeal it--but only if they can raise other taxes somewhere else.  Congressional Republicans have rightly objected to this snowjob on taxpayers.

Now, Congress is at it again.  The House this week will send H.R. 5297 to the President.  It's a bill with a series of small tax cuts and tax hikes.  One of these tax hikes is a new, separate 1099-MISC burden.  This time, Congress' target is owners of rental property.  Starting in January (sound familiar?), rental property owners will have to issue a 1099-MISC to any person or unincorporated firm with whom they do at least $600 in business.  For years starting in 2012, this requirement will extend to anyone the landlord does business with.

So imagine that you're renting out your starter condo.  You pay a property manager, a plumber, a repairman, a locksmith, a condo association, etc.  Imagine having to get a taxpayer identification number, order 1099-MISCs from the IRS, fill them out by hand, keep a copy for yourself, send a copy to each payee (from whom you had to get a tax ID number and other information), and then finally take your legitimate rental deduction.  Then the IRS finds some hiccup somewhere, and you get audited.  All to placate an insane Congress.

Posted by Ryan Ellis on Monday, September 20, 2010 3:34 PM EDT

To follow Ryan Ellis's RSS feed click here. To follow them on Twitter, their handle is @ryanlellis