Businesses Seek Relief from Health-Reform Mandate for More 1099 Paperwork
Firms claim the new requirement is just too big a hassle.
Momentum is growing in Congress to repeal a new tax reporting rule in the health law. The provision requires all businesses, charities and state and local governments to file 1099 tax forms with the Internal Revenue Service when they buy $600 or more in goods from another business. Before the health reform law was enacted, the reporting requirement pertained only to purchasing services of $600 or more from unincorporated providers. Under the new rule, though, firms would have to send a 1099 to Apple, to use one example, every time they bought an iMac. The provision, unless repealed, will take effect in 2012.
The business community is trashing the provision, saying it will pile a massive amount of new paperwork on companies, putting a burden on small companies that can least afford it. It’s especially ill advised during a time of economic fragility, they say.
Sen. Mike Johanns (R-NE) is taking up the cause, pledging to add an amendment that would repeal the reporting requirement to the Senate version of the small business lending bill, which the Senate hopes to take up in September. If he’s successful, the matter would have to be resolved in a conference committee, since the House version contains no such provision.
![https://cdn.mos.cms.futurecdn.net/hwgJ7osrMtUWhk5koeVme7-200-80.png](https://cdn.mos.cms.futurecdn.net/hwgJ7osrMtUWhk5koeVme7-320-80.png)
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
But dropping the requirement will mean a loss of tax revenue. And Congress will have to find another way to raise the $17 billion the provision was estimated to yield from 2012 to 2019 by making it harder for firms selling goods to understate their income to the IRS. A need for revenue was the only reason the provision was included in the $940-billion health law.
The issue is sure to be used as a political bludgeon by Republicans in their campaigns against Democrats in the fall. They’ll point to it as another example of excessive government regulation, pushed by the Democrats, that’s antibusiness and harmful to economic recovery.
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.
-
It's National 401(k) Day: Have You Checked Your 401(k) Balance?
National 401(k) Day is a great opportunity to review and if need be, revamp your 401(k), as well as any other retirement holdings.
By Adam Shell Published
-
Recent Graduate? Financial Fitness Starts Here
Once you've landed a job, it's time to optimize your starting salary with a focus on creating a budget, paying off student debt and saving for retirement.
By Vanessa Okwuraiwe Published
-
Kiplinger Special: How Businesses Should Budget for 2025
Kiplinger Forecasts From fuel to AI software subscriptions, here's what you can expect to pay next year.
By John Miley Published
-
Apple’s Strong Start in Virtual Reality
The Kiplinger Letter Apple’s first year in the VR market sets it up for long-term success. The tech giant’s vision will take years to pay off, though.
By John Miley Published
-
Intel Braces for an Even Tougher Road Ahead
The Kiplinger Letter Amid a long, costly turnaround, Intel resets expectations again. Its new woes raise questions about U.S. industrial policy and global chip competition.
By John Miley Published
-
Astronomical AI Spending Is Causing Jitters on Wall Street
The Kiplinger Letter Amid rampant excitement over artificial intelligence, a new round of skepticism is taking hold. Here are four forecasts about the future of generative AI.
By John Miley Published
-
Car Prices Are Finally Coming Down
The Kiplinger Letter For the first time in years, it may be possible to snag a good deal on a new car.
By David Payne Published
-
Rising Cyber Threat of AI: The Kiplinger Letter
The Kiplinger Letter Security experts warn that generative AI brings new risks with no clear defenses. With AI's rapid adoption, businesses are vulnerable.
By John Miley Published
-
New Graduates Navigate a Challenging Labor Market
The Kiplinger Letter Things are getting tough for new graduates. Job offers are drying up and the jobless rate is increasing. Are internships the answer?
By David Payne Last updated
-
Kiplinger Special: The Long-Term Future of the U.S. Economy
The Kiplinger Letter Kiplinger's report into what it will take the U.S. to maintain a healthy economic growth rate.
By David Payne Published