AICPA calls on Congress to repeal 1099 reporting requirements

The American Institute of Certified Public Accountants (AICPA) called on Congress this week to repeal what it considers burdensome information reporting requirements placed on businesses and rental property owners by the Patient Protection and Affordable Care Act and the Small Business Jobs Act of 2010.

“Businesses do not need the added cost of more regulatory requirements at a time when their efforts must be focused on profitability and sustainability,” the AICPA said. “Increased profitability is likely to yield more tax revenues than the expansions to the reporting requirement.”
 
Under the Patient Protection and Affordable Care Act,businesses making purchases of $600 or more for goods or services from another business would have to provide the vendor and the Internal Revenue Service with a Form 1099-MISC information return. The first 1099 forms would be due in 2013, so businesses would need to begin keeping records in 2012. Under the Small Business Jobs Act of 2010, similar reporting requirements would apply to owners of rental property for expenses related to the rental property and would take effect in 2011 for reporting in 2012.
 
The AICPA said this would be first time individual taxpayers who own rental property and not “engaged in a trade of business” would have to provide Forms 1099-MISC. For example, owners of vacation properties that are rented part of the year to help reduce costs would be covered by the new law.
 
“We are concerned that keeping records to track expenses by provider, obtaining tax identification numbers and other information from providers of property and services, and providing Forms 1099-MISC during January, a month when taxpayers would not normally be focused on tax issues, would be extremely burdensome,” the AICPA stated. 
 
Additionally, the AICPA said it questions the need for sending information forms to certain providers of services, such as utility companies.
 
The business implementation costs associated with the likely generation and receipt of millions of forms and the potentially challenging reconciliation processes for taxpayers should be weighed against the uncertainty of the benefit to be derived by the government, the AICPA said.
 
Identical letters were sent to all members of the U.S. House of Representatives and Senate.
 

Related articles:

You may like these other stories...

Is it time to consider a value added tax?Forbes contributor Joseph Thorndike wrote yesterday that he believes the tax reform proposal by House Ways and Means Committee Chairman Dave Camp (R-MI) was dead on arrival. But he...
Read more from Larry Perry here and in the Today's World of Audits archive.The planning phase of an audit engagement of an entity using US GAAP or a special purpose framework will, with minor differences, include similar...
Internal audit: Know when to discloseIn an excerpt from his book, Lessons Learned on the Audit Trail, Institute of Internal Auditors President and CEO Richard F. Chambers said if you analyze enough audit reports, you can...

Upcoming CPE Webinars

Apr 22
Is everyone at your organization meeting your client service expectations? Let client service expert, Kristen Rampe, CPA help you establish a reputation of top-tier service in every facet of your firm during this one hour webinar.
Apr 24
In this session Excel expert David Ringstrom, CPA introduces you to a powerful but underutilized macro feature in Excel.
Apr 25
This material focuses on the principles of accounting for non-profit organizations' revenues. It will include discussions of revenue recognition for cash and non-cash contributions as well as other revenues commonly received by non-profit organizations.
Apr 30
During the second session of a four-part series on Individual Leadership, the focus will be on time management- a critical success factor for effective leadership. Each person has 24 hours of time to spend each day; the key is making wise investments and knowing what investments yield the greatest return.