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 The provision, unless repealed, will take effect in 2012.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.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free 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.
-
Your Guide to Buying Art OnlineFrom virtual galleries to social media platforms, the internet offers plenty of places to shop for paintings, sculptures and other artwork without breaking the bank.
-
Samsung Galaxy S25 Ultra for $4.99 a Month: A Closer Look at Verizon’s DealVerizon’s aggressive pricing makes Samsung’s top-tier phone tempting, but the real cost depends on your plan and how long you stay.
-
I'm 59 with $1.7 million saved and lost my job. Should I retire?We asked professional wealth planners for advice.
-
Disney’s Risky Acceptance of AI VideosThe Kiplinger Letter Disney will let fans run wild with AI-generated videos of its top characters. The move highlights the uneasy partnership between AI companies and Hollywood.
-
AI Appliances Aren’t Exciting Buyers…YetThe Kiplinger Letter Artificial intelligence is being embedded into all sorts of appliances. Now sellers need to get customers to care about AI-powered laundry.
-
What to Expect from the Global Economy in 2026The Kiplinger Letter Economic growth across the globe will be highly uneven, with some major economies accelerating while others hit the brakes.
-
The AI Boom Will Lift IT Spending Next YearThe Kiplinger Letter 2026 will be one of strongest years for the IT industry since the PC boom and early days of the Web in the mid-1990s.
-
Amid Mounting Uncertainty: Five Forecasts About AIThe Kiplinger Letter With the risk of overspending on AI data centers hotly debated, here are some forecasts about AI that we can make with some confidence.
-
Worried About an AI Bubble? Here’s What You Need to KnowThe Kiplinger Letter Though AI is a transformative technology, it’s worth paying attention to the rising economic and financial risks. Here’s some guidance to navigate AI’s future.
-
Will AI Videos Disrupt Social Media?The Kiplinger Letter With the introduction of OpenAI’s new AI social media app, Sora, the internet is about to be flooded with startling AI-generated videos.
-
What Services Are Open During the Government Shutdown?The Kiplinger Letter As the shutdown drags on, many basic federal services will increasingly be affected.
