On Thursday April 14, President Barack Obama signed legislation that repeals both the expanded Form 1099 information reporting requirements mandated by last year's health care legislation and the 1099 reporting requirements imposed on taxpayers who receive rental income enacted as part of last year's Small Business Jobs Act. The Senate approved the bill on April 5, and the House voted in favor of it on March 3.
Without repeal, the law required businesses and nonprofits to begin reporting on Form 1099 payments in 2012 to contractors, vendors, and others that total $600 or more annually. The IRS hoped to use the new law to track down unreported income.
The American Institute of Certified Public Accountants and state CPA societies had advocated strongly for repeal of both provisions. When the Senate passed the bill on April 5 and sent it to President Obama for his signature, AICPA President and CEO Barry Melancon described the repeal as "a victory for taxpayers."
As a result of the repeal, the 1099 reporting rules continue unchanged. The 1099 Act did not repeal the increase in the information reporting penalties that were mandated by last year's Small Business Jobs Act.
"Today, I was pleased to take another step to relieve unnecessary burdens on small businesses by signing H.R. 4 into law," the president's signing statement read.