On Wednesday, March 3, House Republicans voted to pass H.R. 4, repealing the unnecessary 1099 tax reporting provisions.
Starting in 2012, ObamaCare mandates that all businesses file an IRS Form-1099 for any vendor with which they conduct more than $600 in yearly transactions. This monstrous accounting and paperwork burden will create additional costs for business owners, particularly owners of small businesses, thereby reducing productivity and further stifling economic growth.
H.R. 4 addresses one of the most widely unpopular provisions included in the Patient Protection and Affordable Care Act(“PPACA”) by making three changes to existing federal law. First, it repeals the expanded Internal Revenue Service (IRS) Form 1099-MISC information reporting requirement enacted in section 9006 of PPACA that amends section 6041 (i) of the Internal Revenue Code. Secondly, it repeals the information reporting requirements with respect to real estate expenses enacted last year in section 2101 of the Small Business Jobs Act of 2010(“SBJA”). Lastly, it increases the amount of required repayments for overpayments of health care subsidies enacted in PPACA.
Additionally, ending the 1099 mandate will reduce the deficit by $166 million and federal spending by nearly $20 billion over the next ten years.
Upon passage of the bill, Congressman DesJarlais issued the following statement:
“Washington should not be forcing small businesses to devote resources to burdensome tax filings instead of expanding their business and creating jobs. The 1099 reporting mandate is just another example of how government seeks to expand regulatory requirements with no regard for the effect it has on the American public.
“The 1099 reporting mandate was so unpopular among businesses that even President Obama admitted that it was a flaw that puts an unnecessary burden on small business. While I applaud his concession, this just proves what Republicans have been saying all along. Democrats, in an effort to ram through this unpopular legislation, failed to take into account the negative effects that ObamaCare would have on small business and job creation.”