SENATE FAILS TO REPEAL 1099 REPORTING REQUIREMENTS

The Senate yesterday (Nov. 29) voted on both the Johanns and Baucus amendments to repeal the 1099 reporting requirements.     

Despite agreeing that the healthcare law's 1099 filing provision should be eliminated to keep businesses from bogging down in a sea of paper work and additional tax complications a consensus wasn’t reached.

Democrats and Republicans came to stand still and failed to get the necessary 67 votes (2/3 rule) when bipartisan dispute festered over how to move forward without the new tax reporting requirements.  

The 1099 issue is an unpopular element of the health care overhaul. This could be the last vote on the 1099 issue this year, leaving only one calendar year before the new 1099 reporting goes into effect.

TSCPA will continue to monitor this issue closely and keep members aware of the latest updates and they become available.

Comments

[Free Taxi Software]

The Senate may next try to pass the 1099 repeal as a separate piece of legislation. Earlier efforts to pass the 1099 repeal before lawmakers left for their August recess have also failed to pass in the House.

[thesis writing]

But I doubt they would..

[Sue Guthrie]

It is obvious with this law that no one in Congress has ever run a business or knows anything about it.

This is a administrative nightmare, very costly, time consuming and most likely of little value.

The IRS is understaffed and will not be able to handle the massive load of information.

[James A. Smith, CPA, Chair, TSCPA Federal Tax Policy Communications Subcommittee]

Mr. Paisley is apparently confusing two different pieces of legislation affecting 1099 reporting. The "Obamacare" bill enacted the 1099 legislation which has been the subject of so much controversy. This is the law requiring greatly expanded 1099 reporting, including payments to corporations and for goods as well as services. This law does not go into affect until until 2012 and is the legislation our profession, as well as many other interested parties, has been trying to get repealed.

A second, separate law was included in the 2010 Small Business Jobs Act and goes into affect in 2011. This law includes persons, both natural and legal (e.g. partnerships and corporations), which receive rental income from real property in the definition of a trade or business (with ceertain exceptions) for purposes of the preexisting 1099 rules. This simply means that all rental real estate owners will have to file 1099s on service providers to whom they pay more than $600 beginning in 2011. Because of the limited effect of this law, it has created little controversy and there has been no significant effort at repeal.

[James Paisley]

Doesn't it apply to 2011? I assume we have to send 1099's to utility companies, property taxes, State of Texas (sales taxes, franchise taxes) etc. It would sure would help if newspapers would publish all these tax ID numbers.