More On Legal & Compliancefrom The Advisor's Professional Library
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- Disaster Recovery Plans and Succession Planning RIAs owe a fiduciary duty to clients to prepare for disasters and other contingencies. If an RIA does not have a disaster recovery plan, clients financial well-being may be jeopardized. RIAs should also engage in succession planning, ensuring a smooth transaction if an owner or principal leaves.
The U.S. Senate on Tuesday approved by a vote of 87-12 HR 4, a bill already approved by the House that would repeal a part of President Barack Obama’s healthcare reform law. That part of the law required all employers to file separate 1099 forms with the IRS beginning in 2012 for any payments to vendors in excess of $600, not just to independent contractors. The provision requiring that filing — section 9006 of the Patient Protection and Affordable Care Act — has been roundly criticized by small business groups across the political spectrum.
In his State of the Union address on Jan. 25, Obama addressed his landmark healthcare legislation, saying he was open to making adjustments: “We can start right now by correcting a flaw in the legislation that has placed an unnecessary bookkeeping burden on small businesses.”
The bill had bipartisan support and 274 cosponsors in the House. It is also blessedly short, with the title—The Small Business Paperwork Mandate Elimination Act of 2011—running almost as long as the full text of the bill:
Section 9006 of the Patient Protection and Affordable Care Act, and the amendments made thereby, are hereby repealed; and the Internal Revenue Code of 1986 shall be applied as if such section, and amendments, had never been enacted.
The President is expected to sign the bill, and the White House press secretary released a statement on Tuesday following passage of the bill that read in part: “We are pleased Congress has acted to correct a flaw that placed an unnecessary bookkeeping burden on small businesses. Small businesses are the engine of our economy and eliminating the 1099 reporting requirement is the right thing to do. As we move forward, we look forward to improving the tax credit policy in this legislation to ensure we protect small businesses and middle-class families.”
The Congressional Budget Office had estimated that the provision would have raised $22 billion in revenue. HR 4 has a “pay-for” or revenue offset that balances that "lost" revenue by increasing the amount of the new 36B healthcare credit that is subject to recapture, or claw back, should a taxpayer’s income exceed 400% of the poverty line.