Democratic Senators Introduce 1099 Repeal

Section 9006 of the Affordable Care Act requires all business entities to file a 1099 form with the Internal Revenue Service for each vendor with whom they have cumulative transactions of $600 or more. 

It was inserted as a means of raising $19 billion over 10 years.

Democratic Sens. Ben Nelson, Neb.; Maria Cantwell, Wash.; and Amy Klobuchar, Minn., wrote a letter last week supporting a clean bill repealing the 1099 reporting measure. (http://www.propertycasualty360.com/2011/01/21/three-democratic-senators-send-letter-to-house-fav)

A House bill, H.R. 4, would also strike the tax-reporting requirement in the health reform law, the letter said.

Sens. Baucus and Reid defended the decision to include the reporting provision in the health care reform legislation in a statement announcing introduction of the repeal measure.

"This expansion of the 1099 reporting requirements was proposed by the Bush administration to help better keep track of what businesses spend and earn, which in turn helps better keep track of tax liability," they said.

They said the Treasury Department estimates that more than $345 billion in owed taxes go unpaid each year.

Sen. Baucus said that as chairman of the Finance Committee, he "worked together with the Bush administration to begin crafting the policy, which was designed to collect more of those unpaid taxes and help keep taxes lower for all taxpayers."

However, Sen. Baucus said, after the policy was finalized late last year and became law in early 2010, "more business owners became aware of the new paperwork requirements and raised concerns about the resources that would be required to complete the forms when they would need to begin doing so in January 2012."

Sen. Baucus noted that he had previously introduced legislation to repeal these form 1099 reporting requirements during the 111th Congress in November 2010.