Friday, March 18, 2011

Repeal of Unpopular New 1099 Information Reporting Requirements Moving Forward

The House of Representative has passed H.R. 4, the Small Business Paperwork Mandate Elimination Act of 2011. The bill would repeal new corporate information reporting requirements that are scheduled to go into effect in 2012. The new information reporting requirements were included in Sec. 9006 of the Patient Protection and Affordable Care Act (PPACA, P.L. 111-148). Under current law, payments to corporations, except those made for medical or health care services, are not required to be reported on an information return. Since passage of the PPACA, businesses have raised concerns about the expense and effort required to comply with the expanded information reporting requirements.

The House, the Senate, and the White House all appear to be in agreement that the information reporting requirements should be repealed, but there is some disagreement on how to do it. The Obama Administration issued a statement of administration policy on March 1 that expressed some concerns with how the House bill would make up for the revenue that would be lost from repealing the information reporting requirements.

The bill is now in the Senate.

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