Tax Bill Changes 1099 Reporting Rules – Who Is My Employee?

Harshvardhan Jain served ably as the Indian ambassador to Westarctica. And Seborga. And Ladonia. He drove fancy cars with diplomatic plates, and he worked out of an embassy in Ghaziabad, India.

Now I know what you’re thinking. Ghaziabad must be a made-up place name, right? Sorry, no, Ghaziabad is a real place. But Westarctica, Seborga, and Ladonia are not. Jain was arrested recently for operating fake embassies for made-up nations, using his high-falutin’ status to defraud potential business partners. Allegedly.

Goodbye to Westarctica. We hardly knew you.

Same sentiments to the tax rule requiring businesses to issue an IRS Form 1099 to contractors receiving $600 or more in a tax year. Under the One Big Beautiful Bill, the threshold for issuing 1099s has been raised to $2000. The change goes into effect for 2026.

The effect will likely be that fewer contractors pay taxes on their earnings. Many contractors will figure that no one at the IRS is watching. And for the most part, they’ll probably be right.

The change is in Section 6041 of the Internal Revenue Code. If you look it up, you’ll see it. But don’t bother looking for Seborga on a map. You won’t see that anywhere — except maybe on Harshvarhan Jain’s business cards.