1099 Repeal passes
Thursday, March 03, 2011
U.S. Rep. Steven C. LaTourette (R-Bainbridge Township) today
voted to repeal a costly and cumbersome tax requirement in the new
health care law that will create a compliance nightmare for small
businesses.
The measure, H.R. 4, repeals a new tax requirement that takes
effect in 2012 that would require businesses to file a 1099 tax
form with the IRS for every vendor they paid more than $600 a
year. The requirement was slipped into the health care reform
bill.
The 1099 reporting provision has been criticized by many,
including the IRS Taxpayer Advocate Service. In a report
released in June 2010, the IRS Taxpayer Advocate said the new 1099
reporting requirement would apply to almost 40 million businesses,
including more than 1 million charities and tax-exempt
organizations and more than 100,000 government entities.
The Taxpayer Advocate report said the "new reporting burden,
particularly as it falls on small businesses, may turn out to be
disproportionate as compared with any resulting improvement in tax
compliance." The report also predicted the IRS would
improperly assess penalties "that it must abate later, after great
expenditure of taxpayer and IRS time and effort."
The measure passed today by a vote of 314-112, with the
congressman's support. It now goes to the Senate for
consideration. The Senate earlier this year passed 1099
repeal language as part of a Federal Aviation Administration
bill. The House and Senate will have to hammer out repeal
language that is identical in both the House and Senate before a
measure can be sent to the President for signature.
ShareThis