On Jan. 25, Senate Finance Committee Chairman Max Baucus (D-MT) and Senate Majority Leader Harry Reid (D-NV) introduced a bipartisan bill that would repeal the new Form 1099 reporting requirements for businesses. The bipartisan legislation would repeal requirements for businesses to report payments made for goods and certain services to IRS using Form 1099. As businesses have become aware of the new paperwork requirements, they've raised concerns about the resources that would be required to complete the forms when they would need to begin doing so in January 2012.
In general, under current law, information returns must be made to IRS by every person engaged in a trade or business who makes payments for services, aggregating $600 or more, in any tax year to another person (other than corporations) in the course of the payor's trade or business. Effective for payments made after 2011, Sec. 9006 of the Patient Protection and Affordable Care Act would add payments of amounts in consideration for property and gross proceeds—i.e., it would add payments for goods—to the list of payments subject to reporting. In addition, it provides that starting in 2012, payments to corporations (that are not tax-exempt)—which had previously been exempt from the reporting requirement—would be subject to information reporting.
Baucus had previously introduced legislation to repeal the Form 1099 reporting requirements during the 111th Congress in November 2010.