NU Online News Service, Nov. 15, 2:00 p.m. EST

Legislation will likely be introduced in the Senate this week to repeal a provision of the health care reform law mandating that a form-1099 be filled out for all payments made for goods and services by small businesses.

Sen. Max Baucus, D-Mont., chairman of the Senate Finance Committee, announced the decision Friday. The provision was scheduled to go into effect in 2012.

The provision is designed to raise $18 billion in revenue over 10 years.

It mandates that all businesses, tax-exempt organizations, and federal, state and local government entities will be required to issue Form 1099 to vendors from whom they purchase goods totaling $600 or more during a calendar year beginning in 2012.

Insurance trade groups, including the National Association of Mutual Insurance Companies, the Independent Insurance Agents and Brokers of America, and the National Association of Insurance and Financial Advisors, had joined dozens of other groups in seeking repeal of the provision.

Charles Symington, senior vice president of government affairs at the IIABA, said today, "We are grateful that the chairman of the Senate Finance Committee is focusing on this important issue for small businesses."

He added, "We look forward to working with him and other leaders in Congress to repeal this onerous provision in the PPACA."

The proposal was originally written to keep taxes low by giving the IRS more tools to ensure all owed taxes were paid, Sen. Baucus explained in announcing plans to introduce legislation to repeal the provision.

"However, following passage of the law, some businessowners expressed concern that when the provision does go into effect, the forms would place too large of a paperwork burden on businesses struggling in a still-recovering economy," Sen. Baucus said.

In response to those concerns, he said he would repeal the new reporting requirements "while looking for other ways to improve tax compliance and keep taxes low."

An effort to repeal the provision by Sen. Mike Johanss, R-Neb., by adding an amendment to other legislation failed Sept. 14.

In a recent letter to congressional leadership, the IIABA said that it and many others in the small-business community "oppose this mandate."

The letter cites "the massive amounts of resources that will be poured into new record keeping, accounting and unnecessary compliance procedures," said Robert Rusbuldt, IIABA president and CEO.

NAMIC joined the Coalition for Fairness In Tax Compliance that wrote a letter to all members of Congress on Sept. 9 urging repeal of the provision.

Special Reports /

Senate Will Take Up Repeal Of Onerous 1099 Provision

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