Washington, D.C. - An Internal Revenue Service advisory committee has issued a report calling for a number of changes in the IRS's information reporting rules, including the controversial provision in the health care reform bill that mandates expanded 1099 information reporting for businesses.
"The changes enacted by the Patient Protection and Affordable Care Act of 2010 raise numerous issues about the utility of the data to be reported and the ability of the IRS to process it," said an appendix to the 2010 report of the IRS's Information Reporting Program Advisory Committee. "The expected exponential increase in the number of returns filed, especially paper returns, and the hurdles the IRS must overcome in actually utilizing the return information ..., cry out for a series of exceptions where the utility of the data is small relative to the cost to produce and process it. ... To minimize the significant burdens these reporting changes will engender, payers should have maximum flexibility to determine when and whether to report payees that potentially qualify for an exemption, even refusing a claim of exemption of Form W-9, and to change that determination at any point."
The report also suggested that the IRS delay a requirement for companies to report the cost of health coverage on employees' W-2s for 2011. The IRS later announced that it would be deferring the reporting requirements until 2012.
Other sections of the report deal with cost basis reporting by financial institutions of customer cost basis in securities transactions; payment reporting (Section 6050W) made in settlement of payment card and third-party transactions; and withholding and tax information reporting of payments of U.S. source income to foreign financial institutions and non-financial foreign entities, under the Foreign Account Tax Compliance Act.
IRPAC provides a public forum for the IRS and members of the information reporting community in the private sector to discuss relevant information reporting issues.
Register or login for access to this item and much more
All Accounting Today content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access