Here is a report that came from the publication the Hill. I think all
small business owners would be glad if this 1099 rule gets repealed. Can
you imagine all the paper work that it would take to keep up with this
regulation. If you take that a step further how would IRS administer and
cross reference all the 1099's that they will receive.
Take for example an over the road trucking company. It's trucks purchase
fuel at a bunch of different stops. I would only take about three fuel
fill ups to make the $600.00. How many 1099's that would have to be
issued by the trucking company would be any ones guess.
Here is the article that was written by the hill.
In preparation for the upcoming Senate debate on the small-business bill,
the Small Business and Entrepreneurship (SBE) Council is asking members to
contact their senators and urge them to support an amendment by Sen. Mike
Johanns (R-Neb.) that repeals the 1099 rule.
The new healthcare law requires organizations to fill out Form 1099 for
any purchase of at least $600 and report it to the IRS beginning in 2012.
The requirement was created to improve tax compliance, but several business
groups and tax-policy experts have said that it will be onerous and costly on
businesses.
"The extent of this new paperwork requirement on business owners is
astounding, as businesses estimate that they will have to file hundreds and
sometimes thousands of new 1099s per year," the SBE Council stated in a
letter Thursday to senators. "The IRS National Taxpayer Advocate Nina
Olson stated that the administrative costs of small businesses are so high that
it 'may turn out to be disproportionate as compared with any resulting improvement
in tax compliance.' The Johanns amendment is the only solution that fully
protects small-business owners from this costly new burden."
The Senate is expected to review the reporting requirement when it debates
legislation providing tax relief and loan opportunities to small businesses.
That bill is expected to be the first issue debated when senators return next
week.
Under current law, just about every organization must issue a Form 1099 to
the IRS for every unincorporated service provider it pays more than $600 during
a tax year. The rule covers payments made for goods and services that cannot be
tracked by payments made by credit card.
During debate on the small-business bill before the August break, Johanns
sought to repeal the requirement. Sen. Bill Nelson (D-Fla.) suggested amending
it by exempting firms with fewer than 25 employees from the rule. Nelson also
wanted to raise the reporting threshold to purchases over $5,000, not $600, as
is current law. The SBE Council opposes Nelson's approach.
Sen. George Voinovich (R-Ohio) on Thursday signaled he would support the
small-business bill if Senate Majority Leader Harry Reid (D-Nev.) allowed a
debate on the 1099 rule.
Voinovich's support could mean that Democrats have the 60 votes they need to
pass the legislation from their chamber.
