To the contrary still sailing, it encourges a cash transaction on anything over 600 bucks, so as to not have to go through the hassle of this bull crap paperwork. The goverment can try as they might, but until they have an agent in every business watching every transaction, (and under Obama that will happen eventually), they will not be able to control the under the table deals. What these guys don't get is that without the occasional tax free deal, most small business owners wouldn't find it worthwhile to own and run a business, employeeing the majority of Americans. The government has taken more and more of the incentive to be an enteprenure away, which is what the liberal communist marxist want. Why they couldn't just go live in one of the communist marxist nations that exist already, I don't know, but they seem intent on destroying this country, and the capitalist system that built it.  

Not being a tax pro but layman's knowledge it has alway been that labor and such services to small companies ovewr 600 was to be reported.  It did seem to exclude materials and products.  That's the big change here, but on the IRS web site they seem to imply that credit cards may be exempt, to wit:

IR-2010-79, July 1, 2010

WASHINGTON — The Internal Revenue Service today invited public comment on how to most effectively carry out a law change that, starting in 2012, will require businesses to report a wider range of payments to contractors, vendors and others, usually on Form 1099. These comments will help the IRS issue guidance that implements this provision in a manner that minimizes burden and avoids duplicate reporting.

Under a proposed regulation, many business purchases made with credit or debit cards would be exempt from the new reporting requirement because they are already reported by banks and other payment processors. The IRS seeks comments on additional circumstances in which duplicate reporting might otherwise occur and on rules that would prevent such duplicate reporting.

The change, enacted in March but not effective until 2012, expanded existing reporting requirements to include a business’s payments related to goods and other property, and payments to most corporations. With some exceptions, payments to corporations are currently exempt from this requirement.

You send the 1099 to the supplier because you're using Amex as a middle man to pay them. Here's how you set it up in your accounting software:

You go to Acme Supply and pay for $100 worth of supplies with a company credit card from Visa. You come back to the office and enter the receipt as an invoice under the Acme Supply vendor account. The invoice is coded to the supplies expense account.

You then enter a manual payment to pay the invoice so you don’t show a payable. The account code for the $100 payment is a liability account set up for this purpose, not the cash account. When the payment is applied to the invoice and posted to the general ledger, it effectively moves the amount owed from the general accounts payable account to a specific liability account for what is owed to the credit card company.

When the invoice from Visa arrives, it’s entered under the Visa vendor account and coded to the same liability account. When this invoice updates the general ledger, it reduces the liability to the credit card company and puts it back into general accounts payable. You then pay the Visa invoice normally in a check run.

If you make these purchases with a credit card, does the 1099

go to the credit card co. or must you somehow seperate out and

itemize money spent at each supplier?

If you write a check to Amex, why wouldn't you send the 1099 to Amex?