January 25, 2011
The Honorable Dave Camp The Honorable Sander Levin
Chairman Ranking Member
Committee on Ways and Means Committee on Ways and Means
U.S. House of Representatives U.S. House of Representatives
Washington, DC 20515 Washington, DC 20515
Dear Chairman Camp and Ranking Member Levin,
As President of the National Association of Enrolled Agents, I write to you both on behalf of our nearly 12,000 members and on behalf of the 46,000 enrolled agents currently representing millions of taxpayers across the country. We ask that you take action on H.R. 4, the Small Business Paperwork Mandate Elimination Act of 2011, which would repeal Section 9006 of the Patient Protection and Affordable Care Act (P.L. 111-148) and relieve the extremely burdensome Form 1099 reporting requirements on small business taxpayers.
Section 9006 of (P.L. 111-148) places an unprecedented burden on small businesses by requiring them, beginning in 2012, to issue Forms 1099 to corporations for purchases of $600 or more for goods and services. These businesses will also be required to issue copies to the Internal Revenue Service. Small businesses will see substantially increased compliance costs to gather information, prepare and mail these additional Forms 1099. In addition to the increased cost for small businesses, the difficulties of IRS’ implementation of the provision, receiving and reconciling these forms, will have significant costs and uncertain fiscal benefits. Instead of creating a barrier to growth, this onerous provision should be repealed to aid small business taxpayers in development and job creation.
While we support H.R. 4, we would be remiss if we didn’t raise a related Form 1099 issue. The Small Business Jobs Act (P.L. 111-240) requires persons receiving rental income from real property to file information returns for payments of $600 or more during the year for rental property expenses. Enrolled agents provide tax advice to many Schedule E filers, and we foresee non-willful taxpayer compliance problems with the provision. The newness of the provision, effective January 1, 2011, and the annual January 31 submission date are problematic. We suggest either legislative or regulatory action be taken to address this compliance issue providing for a transition period. Given the recent changes to the filing of Form 1099 on taxpayers we suggest it is feasible to address both issues at the same time.
With 245 co-sponsors, Congressman Daniel Lungren has amply demonstrated bipartisan support for the Small Business Paperwork Mandate Elimination Act. We strongly support H.R. 4 and urge you to promptly take up the bill to prevent this arduous provision from harming small business taxpayers across the country.
Gina Jones, EA
President, National Association of Enrolled Agents
cc: The Honorable Douglas Shulman, Commissioner, Internal Revenue Service