Efforts are continuing in an effort to ease some of the new Internal Revenue Service Form 1099 information reporting rules put in place by the health care reform law. In furtherance of this effort, Senate Small Business Committee Chairman Mary Landrieu (D-La.) has introduced a proposal that would scale back requirements. Meanwhile Sen. Mike Johanns (R-Neb.) is continuing a separate course that would result in a repeal of the reporting provisions.
Under current law, any business that pays more than $600 per year to a single vendor for services or goods will be required to file a Form 1099 information report. The provision, added to the Patient Protection and Affordable Care Act as a way to raise $17 billion for the bill, is now expected to raise $19 billion.
Landrieu's bill would raise the threshold for businesses to file information reports to $5,000 from its current level of $600 and would index the threshold to inflation after 2012.
While those levels are similar to those in the failed amendment offered by Sen. Bill Nelson (D-Fla.) on the small business bill, the Landrieu bill would not exempt businesses with fewer than 25 employees and does not include an offset to pay for the change. A Landrieu aide said the senator is open to working with both Democrats and Republicans to find an acceptable offset for the legislation.
Purchases made with a credit card or other third-party network would be exempted from information reporting requirements where a return is already required to be filed under tax code Section 6050W, under the Landrieu bill.
For his part, Johanns says he cannot support anything short of a full repeal of the Form 1099 rules and that he will continue to push for passage of the repeal through standalone legislation that he introduced in July.
