In a press conference following Tuesday’s midterm elections that saw Republicans win control of the House, President Obama conceded that new Form 1099 reporting requirements are “burdensome” for small businesses and vowed to work with Republicans on a legislative fix.
Enacted as part of the landmark Patient Protection and Affordable Care Act passed by Congress in March, the Form 1099 requirements force all businesses and tax-exempt organizations to issue a Form 1099 to vendors from whom they buy goods totaling $600 or more annually. ASAE and others have pointed out that the change, scheduled to take effect in 2012, could result in associations having to issue hundreds or even thousands of forms each year, track cumulative payments to vendors, and obtain tax identification information from each vendor. The National Taxpayer Advocate has estimated that 40 million businesses, charities and associations would be impacted by this new requirement.
Asked about Republicans’ stated interest in repealing or weakening the health care law that represents Obama’s signature legislative accomplishment, the president defended the law’s primary provisions while saying he’s open to ideas that improve on the progress that’s been made.
The Form 1099 provision in the health care bill “just involves too much paperwork, too much filing,” Obama acknowledged. “It’s probably counterproductive. It was designed to make sure that revenue was raised to help pay for some of the other provisions, but if it ends up just being so much trouble that small businesses find it difficult to manage, that’s something that we should take a look at.”
Repealing the Form 1099 requirements has broad support from both sides of the aisle, and House Republicans such as Rep. Fred Upton (R-MI) have suggested that a 1099 repeal bill should be put to a vote early in the 112th Congress.
Source: ASAE Public Policy Division, November 4, 2010