Bill Repealing 1099 Reporting Requirements Sent to President
April 5, 2011
The Senate voted 87-12 today (April 5) to repeal the 1099 information reporting provision of the healthcare law, which would have placed an unprecedented burden of reporting and paper work requirements on businesses.
The measure now awaits President Obama's signature. The repeal amendment, offered by Sen. Mike Johanns (R-NE), was part of a small business bill.
Section 9006 of the health care legislation would have required any taxpayer with business income to issue 1099 forms to all vendors from whom they purchased more than $600 of goods and services that year. Starting in 2012, these entities would have been required to keep track of all non-credit card purchases made from a business, by the business tax ID number.
The following year the entity would have been required to file a Form 1099-MISC with the IRS and send a copy to the business with the total purchased for the calendar year from that business, the business name, address, and tax ID number.
The goal of the provision was to close the gap between what companies actually pay vendors and what those vendors report on their taxes. The government projected to collect $19 billion over a 10-year period. An estimated 40 million taxpayers would have been subject to the requirement, including 26 million who run sole proprietorships, according to a report.
ALTA informed members that payments by title companies at closing were never subject to the 1099 requirement. However, payments by title companies for goods like new office supplies, professional services and other operating costs would have been subject to the requirements.
Contact ALTA at 202-296-3671 or email@example.com.