Democrats are charging that Ways and Means Committee Republicans are trying to squeeze struggling middle-income families to pay for a Form 1099 reporting provision fix.
Republicans on the committee want to offset the cost of a fix by having the Internal Revenue Service (IRS) be more aggressive about getting excess health insurance tax subsidy payments back from middle-income taxpayers.
“The subsidy recapture provision is not a tax increase in any way, shape or form,” and every current Democratic member of the committee voted for a similar provision in December 2010, to avoid cutting Medicare provider reimbursement rates, Republican committee members say.
Democrats say the Republicans are misrepresenting their approach.
“This Republican tax hike would penalize middle class Americans who sought affordable health insurance for their families, did everything they were supposed to, and had the tenacity to be hired or get a raise,” according to Rep. John Larson, D-Conn. “It unfairly hurts low- and middle-income families who are seeking affordable health insurance and greater opportunity.”
Ways and Means members agreed by a voice vote Thursday to pass a bill, H.R. 4, that would repeal Section 9006 of the Patient Protection and Affordable Care Act (PPACA). If implemented as written, PPACA Section 9006 could require a business to send a Form 1099 to the Internal Revenue Service when the business does more than $600 in business with a vendor in a tax year.
Committee members also voted 21-15 to approve a second bill, H.R 705, that would cancel the expanded 1099 reporting requirements by revising Section 6041 of the Internal Revenue Code. The bill includes a second provision that would cancel new rental property owner expense reporting requirements, and a third provision designed to make up for the $22 billion in revenue that could be lost as a result of the reporting changes.
Members of the Senate voted 87-8 Thursday to approve a third measure – S. 233, an aviation modernization bill that includes a 1099 fix amendment. The 1099 fix amendment in S. 233 would eliminate the expanded Form 1099 reporting requirements by changing Internal Revenue Code Section 6041. That version of the fix would pay for at least part of its effects on tax revenue by drawing on federal agencies’ unspent funds.
THE CLAWBACK PROVISION