July 29, 2010
Sen. Mike Johanns (R-NE) has introduced a bill that would repeal a costly tax reporting provision in the new health care bill requiring all businesses and tax-exempt organizations to issue a Form 1099 to vendors from whom they buy goods totaling $600 or more annually.
The new requirement, scheduled to take effect beginning in 2012, will impose a massive paperwork burden on an estimated 40 million businesses, charities and associations, according to the National Taxpayer Advocate. ASAE has joined the U.S. Chamber of Commerce, the National Federation of Independent Business (NFIB) and other business organizations in support of legislation repealing this requirement.
“This mandate forces businesses to waste staff time and resources on paperwork that even the IRS says will likely be of little value,” Johanns said last week. “One more mandate that stifles small businesses at the same time that Washington urges them to hire more workers. For businesses already struggling to emerge from a recession this would be particularly burdensome, requiring government paperwork for common, everyday purchases.”
The Taxpayer Advocate expressed concern in its mid-year report to Congress earlier this month that the reporting burden on businesses “may turn out to be disproportionate as compared with any resulting improvement in tax compliance.”
Johanns had offered the 1099 repeal language in an amendment to the small business tax relief bill under deliberation in the Senate, but the bill was effectively blocked by a GOP-led filibuster earlier today.
Source: ASAE Public Policy Division, July 29, 2010
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