WASHINGTON–The Senate is expected to take up as early as the week of Sept. 13 changes to the to the health care reform law designed to limit a stringent tax-reporting mandate scheduled to go into effect in 2012.
That provision, considered particularly irksome to small businesses, is designed to raise $18 billion in revenue over 10 years.
It mandates that all businesses, tax-exempt organizations, and federal, state and local government entities will be required to issue IRS Form 1099 to vendors from which they purchase goods totaling $600 or more during a calendar year beginning in 2012.
An official of the National Association of Insurance and Financial Advisors who is tracking the issue said “NAIFA members welcome modifications to the new 1099 requirements to ease the burden on their small business clients.”
The Independent Insurance Agents and Brokers of America is being particularly vocal on the issue. In a recent letter to congressional leadership, the IIABA said that it and many others in the small business community oppose the tax mandate.
The letter criticizes “the massive amounts of resources that will be poured into new record keeping, accounting and unnecessary compliance procedures,” according to Robert Rusbuldt, IIABA president and CEO. “The mountain of paperwork required to comply with this provision will cost the federal government time and money, divert resources and prevent investment in job growth and business expansion at a delicate point in the American economy.”
Lobbyists claimed that if a self-employed individual makes numerous small purchases from an office supply store during a calendar year that total at least $600, the individual would have to issue a Form 1099 to the vendor and the IRS showing the exact amount of total purchases.