A new information reporting requirement created to help pay for the health care law will place an unnecessary and expensive paperwork burden on small businesses and needs to be repealed. The new mandate will require businesses to use Form 1099 to report to the Internal Revenue Service all payments to corporations in excess of $600 for goods and services.
The information reporting requirement, which is set to go into effect in 2012, is a costly and time-consuming mandate placed on you, a small-business owner. Businesses are already overburdened with tax paperwork and reporting requirements, and the additional requirements included in the health care bill will only increase the cost and complexity of complying with the tax code.
The changes proposed by section 9006 would have a significant adverse effect on my business, on dental practices across the country, and on small businesses in a variety of industries. Like other small business owners, dentists do not have the staff resources that would be required to comply with the extra work as mandated. Tracking payments to individuals and suppliers for services and/or goods purchased would take time away from treating patients. It also would likely require dentists to collect the names and taxpayer identification numbers of virtually every supplier with whom we do business. The reporting requirements would cause dental practices to either absorb these administrative costs or increase patient fees as a way to defray that expense. Obviously, none of us want to consider the possibility of increasing fees at a time like this, when everyone is so concerned about possible increases in health care costs.
In his State of the Union address Tuesday, President Obama said he will support repealing the requirement in the health care reform law that requires employers to fill out a 1099 tax form every time they spend $600 on goods and services, a repeal that the National Automatic Merchandising Association (NAMA) has sought.
In a recent legislative memo, NAMA reported that the U.S. House of Representatives is preparing to debate H.R. 4, which will overturn new IRS 1099 reporting requirements. As currently enacted in the 2010 health care legislation, in 2012 all companies will be required to file 1099 forms with the IRS for transactions cumulatively valued over $600. NAMA supports repealing this expensive new reporting requirement.
AIM believes the 1099 provision would saddle employers with significant administrative and accounting expenses at a time when many firms are still struggling with a soft economy. We appreciate Representatives Frank and Tsongas for supporting the measure, and will ask other members of the Massachusetts Congressional delegation to join them.
Senator Mike Johanns (R-NE) and Representative Dan Lungren (R-CA), lead champions of repeal in the last Congress, are leading the charge again. Both have re-introduced their repeal bills, S.18, the Small Business Paperwork Reduction Act, and H.R. 4, the Small Business Paperwork Mandate Elimination Act. Almost everybody on Capitol Hill concedes the new requirement is a bad idea. ANLA supports full repeal of the 1099 mandate and urges swift passage early in the 112th Congress.
Supports HR 4. The AMA is concerned that applying the expanded form 1099 requirements to physicians will be onerous and extremely burdensome, especially for those physicians in small practices. The stricter requirements will force business owners to collect tax identification information for companies, contractors, and vendors. Business owners will have to file two forms for each transaction—one with the IRS and the other with the vendor. These provisions will create an expensive reporting burden that will negatively impact the operations of businesses, particularly small businesses.
AGC supports H.R. 4, the Small Business Paperwork Mandate Elimination Act, which amends the Internal Revenue Code to repeal a provision (added by the Patient Protection and Affordable Care Act) that extends to corporations that are not tax-exempt the requirement to report payments of $600 or more.
Supports HR 4, the Small Business Paperwork Mandate Elimination Act of 2011, which would repeal Section 9006 of the Patient Protection and Affordable Care Act (P.L. 111-148) and relieve the extremely burdensome Form 1099 reporting requirements on small business taxpayers.
Supports HR 4. SEMA has steadfastly opposed the burdensome rule that will require businesses to issue 1099 reporting forms to all vendors from whom they buy more than $600 of goods or services in any year, beginning in 2012.
H.R. 4 would repeal a portion of the Patient Protection and Affordable Care Act that requires small business owners to file a 1099 form for every business-to-business transaction over $600 a year. This new reporting requirement will wreak havoc on small businesses by drastically increasing their paperwork burden.
We strongly support this legislation to repeal the new 1099 reporting provisions, which would bury our hometown publishers - and our small business advertisers - in needless paperwork. The $600 annual threshold for all goods and services would trigger an avalanche of duplicative reporting and needlessly risk identity theft.