House Democrats today tried to repeal the new Form 1099 requirements set to go into effect in 2012 as part of the health care reform law. Republicans, however, objected to the way the bill was introduced and how the majority party planned to pay for the change.
The provision in question would require businesses to file a Form 1099 with the IRS to for each supplier
or service provider to which they make payments of more than $600 in a single year.
While Republicans have introduced bills in both the House and Senate to repeal the new 1099 filings, Democrats in the House tried to do just that late Friday afternoon. They failed.
As
introduced, the measure required a two-thirds vote to pass
the House. It fell short, garnering 241 yea votes and 154
nay votes. All of the no votes were cast by Republicans and a lone
Democrat. Two Republicans voted for the bill.
GOP members opposed the Democratic repeal effort on two grounds.
The main Republican objection was foreign tax law changes — including the prevention of splitting of foreign tax credits (FTC) from income, prohibition on taxpayers from claiming a credit for foreign income that is
never subject to U.S. taxation because of a covered asset acquisition and repeal of the 80/20 rules — that Democrats wanted to use to offset the estimated $19 billion that the added Form 1099 filings are projected to produce.
In addition to having issues with the offsets, Republicans were angered by the way the bill was introduced by the majority party. Earlier, Democrats had postponed a vote on a
Republican motion to repeal the IRS reporting rule.
While Friday's vote looks like more political posturing in advance of the midterm elections, the vote at least was an indication that the added 1099 rule is becoming universally unpopular on Capitol Hill. That bodes well for its eventual removal before it takes effect in just over a year and a half.
You can read more on the vote in the Wall Street Journal, the Hill's On the Money blog and the Washington Post.
Related
posts:
- Lawmakers seek repeal of new 1099 forms
- Don't fall for health care tax rumors
- Health care reform taxes, redux
- Tax provisions in the health care bill
- Adding adult kids to health care, FSAs
- IRS health care notices hitting mailboxes
- IRS health care expansion not imminent
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alliantgroup
In 2012, the health care reform law will require ALL businesses, governments and charities to issue 1099 forms to vendors they pay over $600 for goods and services. This will undoubtedly financially crush thousands of small-and-medium-sized businesses who work for these companies. Read alliantgroups’ (www.alliantgroup.com) Dean Zerbe’s take on the 1099 burden and where its repeal currently stands in Congress and the administration. http://bit.ly/cG7USr
Tax Software Hombre
Looking at this from a 1099 software developer’s perspective – if these changes (or something like this) does make it through the house is there anything we’d need to incorporate or consider in regards to our 1099 filing application?
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