Roberts Offers Cure for Paperwork Headache
Senate bill would repeal 1099 filing mandate in health care reform law.
Kansas Sen. Pat Roberts (R) has co-sponsored a bill to repeal a provision of health care reform that critics say would cause big headaches for small businesses.
As we reported in May, the Affordable Care Act contains a provision requiring businesses to file IRS 1099 tax forms not just for independent contractors, as is now required, but for all individuals and businesses from which they purchase more than $600 in products or services beginning in 2012.
Sen. Roberts joined Sen. Mike Johanns (R-NE), who introduced the Small Business Paperwork Mandate Elimination Act to repeal the 1099 mandate in the health care reform law. Rep. Daniel Lungren (R-CA) introduced a similar repeal effort in the House of Representatives. His Small Business Paperwork Mandate Elimination Act (H.R. 5141) was referred to the House Ways and Means Committee on April 26.
The intent behind the new 1099 requirement was to close an estimated $300 billion gap between taxes paid versus what is owed. Because a copy of each 1099 is filed with the IRS, the change seeks to close this gap in two ways: by making it more difficult for companies to underreport revenue, and by making it less likely businesses will overstate expenses.
Opponents of the measure say it will be an administrative nightmare, with an estimated 2,000 percent increase in the number of 1099s filed. Not only will businesses be required to track every purchase from every source throughout the year, they also will be required to collect taxpayer identification numbers for every supplier and determine whether a specific location is an independent franchise or company-owned.
"Unless corrected, this time-wasting mandate of 1099 filings on common purchases needed to do business will stifle economic growth and job creation while the IRS will be handed a paperwork nightmare,” said Sen. Roberts.
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Comments You must javascript enabled to use this form I do hope this gets corrected. For businesses like mine where I'm a 'one man band', this is an administrative nightmare & totally unnecessary. I track all of my expenses in detail and work diligently with my accountant to report accurately as it is. One more step just might crush me from a time perspective. When will there be any time left to actually earn any money? |
