Attempt to repeal 1099 requirement fails
by AccountingWEB on
Efforts by House Democrats on Friday to repeal an Internal Revenue Service filing requirement contained in the new health care legislation failed when the measure fell short of the two-thirds majority vote needed to pass.
The measure, proposed by House Ways and Means Chairman Sandy Levin (D-MI), sought to repeal a requirement of businesses to report to the IRS any purchase from a vendor of goods or services worth $600 or more during the calendar year.
The measure failed 241 to 154 in a vote that followed party lines almost entirely.
The American Institute of Certified Public Accountants (AICPA) last month told members of Congress they should repeal the reporting requirement, which takes effect next year, because it will be burdensome and costly for small businesses to compile the data and prepare the Form 1099-MISC information return.
Furthermore, the AICPA said the information collected on the 1099 forms will not be helpful to the IRS in collecting any unpaid taxes that should have been paid by the vendor because it will be difficult to reconcile payments reported on the forms and income reported by the vendor.
Rep. Levin on Friday said the reporting requirement is "a potentially onerous burden for small businesses." However, the extra reporting, according to The Wall Street Journal, is projected to raise $17 billion in government revenues for the IRS over the next decade because it will give the IRS ability to seek out income currently not reported by vendors.
To replace that revenue, Democrats proposed curbing foreign tax credits that multinational firms use to lower their U.S. tax burden. This revenue-raising proposal, however, presumably was the death knell for a measure supported by Democrats and Republicans, alike.
Sen. Mike Johanns (D-NE), among other senators, is looking to add a provision repealing the IRS reporting requirement to a small-business tax package pending in the Senate, according to The Wall Street Journal. Several Senate Democrats last month raised concerns with the IRS regarding the reporting mandate.
- AICPA asks Congress to repeal new 1099 reporting provision
- AICPA's tax accountants get immersed in tips, new law, and sunshine
Wait, there's more!
There's always more at AccountingWEB. We're an active community of financial professionals and journalists who strive to bring you valuable content every day. If you'd like, let us know your interests and we'll send you a few articles every week either in taxation, practice excellence, or just our most popular stories from that week. It's free to sign up and to be a part of our community.
Premium content is currently locked
2 weeks 8 hours ago by mucar1990