The House has tentatively scheduled a vote on legislation that would repeal the expanded 1099 information reporting requirements passed by Congress last year.
Dan Lungren
The House Ways and Means Committee approved two separate pieces of legislation last week to repeal the 1099 requirements in both the Affordable Care Act and the Small Business Jobs Act, and sent them to the full House for consideration (see House Panel Approves 1099 Legislation).
The House is tentatively scheduled to take up at least one of the bills next week, H.R. 705, the “Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act of 2011,” according to The Hill’s Floor Action Blog. The bill, introduced by Rep. Dan Lungren, R-Calif., would repeal the requirement for businesses, including rental property businesses, to report on any purchases of goods or services of more than $600 per calendar year to the Internal Revenue Service on a Form 1099-MISC.
However, there is continuing disagreement on how to pay for the repeal. The bill passed by the House Ways and Means Committee would require low-income and middle-class taxpayers who qualified for health insurance tax credits under the health care reform bill to repay the full amount of the tax subsidies if they earn more during the year than the amount needed to qualify. Democrats on the Ways and Means Committee objected to that revenue offset.
The Senate also passed a repeal of the health care reform bill’s 1099 information reporting requirements last week as part of a larger reauthorization bill modernizing the Federal Aviation Administration (see Senate Passes FAA Bill with 1099 Repeal). But it differs from the House bill by not repealing the 1099 reporting requirements for rental property owners in last year’s Small Business Jobs Act. It would also offset the loss in tax revenue by giving the Office of Management of Budget the task of making unspecified spending cuts of an equal amount in unobligated funds.
3 Comments
I agree with some of the comments posted. A lot of it does not make sense and is just paper work and burdensome to business. Having said that, I can already see one benefit in action. Many landlords who are paying for remodel jobs or even basic work are getting w-9's. This would bring in a lot of the underground economy. That is a fact.
Posted by: DANDYBOY5 | February 28, 2011 7:10 PM
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This is just another example of Congress passing someone's great idea without thinking through the consequences. "Unknown" is correct, the IRS cannot process the information. It can't process what it gets now because is it understaffed and doesn't have the technology. And Congress just continues to throw more on top. That's not even mentioning the crushing burden it put on businesses, and why? Someone's big idea... probably someone who knows nothing about business or economics. This crushes business, crushes the IRS, and will result in a mountain of paperwork that is untouched. Way to go Congress! Pat yourselves on the back for this one! You've pulled some bonehead moves before, but this one is a beaut! At least have the decency to repeal this monster. Bad law is bad law and the price tag of repealing it should not be the reason a bad law is allowed to remain.
Posted by: jeneane1956 | February 28, 2011 9:20 AM
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How did this ever become enacted in the first place? What was the IRS going to do with the information? They certainly are not capable of processing it. Now they are worried about the revenue short fall. WHAT. All you were doing was generating useless paper. How does eliminating this fiasco create a revenue short fall except in someones little mind.
Posted by: Unknown | February 28, 2011 8:06 AM
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