We briefly discussed some of the new burdensome 1099 requirements that came out of the Small Business Jobs Act one of our December blogs; IRS requires 1099’s….  We haven’t yet discussed the extremely burdensome 1099 requirements that came out of “The Patient Protection and Affordable Care Act” (affectionately known as “Obamacare”).  Expanded 1099 reporting requirements include all payments for both goods and services aggregating $600 or more in a calendar year, including those made to corporations.  Effectively this means virtually all business transactions must be reported to the federal government.    Government analysts estimate that this reporting will flush out taxpayers who do not report, or under report their income.  To many of us who have studied this proposal, the compliance cost to businesses and the taxpayer cost to fund the bureaucracy that must process all this data seems more costly than the perceived unreported tax revenue. 

Relief may be coming.  Thanks to some heavy pressure by the AICPA and many state CPA societies, the House Ways and Means Committee approved a bill earlier this month to repeal these expanded 1099 requirements.  It has been sent to the house for a full vote.  The Senate has a similar bill, but it doesn’t appear to be as comprehensive.  Of course, it wouldn’t come without a cost.  The House bill includes measures to make up for the perceived revenue loss.   The Journal of Accountancy’s article has more information.

In the mean time, the 1099 requirements for rental property owners is still effect.  Read the article for full details and continue to prepare yourself until it is actually repealed.  Keep your fingers crossed for full repeal!

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