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Graves: 1099 Reporting Rule has Stalled Small Business Growth in America


Washington, D.C., Oct 26 - Despite repeated requests from House Small Business Committee Ranking Member Sam Graves (R-MO) for information, Internal Revenue Service (IRS) Commissioner Douglas Shulman continues to decline to provide any details about the planned implementation of the health care law’s 1099 reporting rule. 

This mandate requires every business to file a 1099 form for each purchase of goods or services of $600 or more per year from another entity, and is expected to dramatically increase compliance costs and paperwork for employers.  Just last week, one of the IRS’s own advisory groups released a report calling the mandate a “burdensome” requirement with “no measurable purpose.”

“I am extremely disappointed by the IRS’s ongoing refusal to help employers understand the impact of this hefty requirement,” Ranking Member Graves said. “The questions and confusion surrounding the 1099 reporting rule have stalled small business growth in America.  Entrepreneurs are unable to plan for the future, expand their operations or hire new employees for fear that this mandate could force them to dramatically change the way they do business.  In these difficult economic times, increasing uncertainty for our nation’s greatest job creators is the worst thing we can do.  I respectfully reiterate my request that Commissioner Shulman and the IRS provide our small business owners with some much needed clarity on the scope of this rule.”

Ranking Member Graves and members of the House Small Business Committee previously sent Commissioner Shulman a letter expressing their concerns about the numerous implementation issues and effects of the 1099 rule on June 23, 2010.  Despite a written request for a response within 14 business days, neither Commissioner Shulman nor his aides have made any effort to reply to the letter.  Three weeks ago, Ranking Member Graves sent a follow-up letter to the Commissioner restating his request for details, but has not received any response or acknowledgement from the IRS.

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