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PMAA is continuing to support legislative
efforts to repeal the much publicized new 1099
reporting requirements which will be enormously
burdensome to all businesses. PMAA is joining
forces with other small business groups to send
a new letter to all Senators urging them to
support Senator Mike Johanns' (R-NE) amendment
to fully repeal Section 9006 of the “Patient
Protection and Affordable Care Act.” This
section was added to the healthcare reform law
and mandates all companies to issue 1099 tax
forms to any individual or corporation from
which they buy more than $600 in goods or
services in a tax year. The amendment is still
pending to the Small Business Lending Act of
2010 (H.R. 5297) which Senate Majority Leader
Harry Reid (D-NV) and Minority Leader Mitch
McConnell (R-KY) were unable to reach agreement
on before Congress adjourned for August recess.
When the law goes into effect in 2012, the 1099
reporting requirement will impose substantial
paperwork and reporting burdens on all small
businesses which will dramatically increase
accounting costs, impose unjustified audits by
the IRS, and subject more small businesses to
the challenges of electronic filing. As an
attempt to compromise, Senator Bill Nelson
(D-FL) introduced a second 1099 reporting
requirement amendment which increases the
payment threshold to $5,000 (up from $600) for
the year for payments made to vendors, and his
language would exempt businesses with 25 or
fewer employees from having to issue a Form 1099
for payment to vendors. The amendment creates
exceptions from the “property” information
return requirements, but does not apply to
“services” transactions. Essentially, the Nelson
amendment would force small businesses to track
expenses with both “property” and “services,”
thereby further complicating the reporting
process and leaving administrative costs high.
PMAA supports Sen. Johanns’ amendment to fully
repeal the 1099 reporting requirement. Also,
leading the repeal effort in the House is
Congressman Dan Lundgren (R-CA), who has
introduced H.R. 5141, the “Small Business
Paperwork Mandate Elimination Act.” Click
here to send a letter in support of the
Johanns’ amendment and
here to send a letter in support of H.R.
5141.
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