The recently enacted IRS 1099 report, in which every company must document annual purchases totaling more than $600 in goods and services, may soon be reversed.
Earlier this month, the U.S. Senate approved an amendment to strike the provision, which was part of health-care reform law. Under the new law, next year businesses will need to issue millions of new tax documents to meet the 1099 provision. Business owners have expressed concern over the administrative costs, particularly for small businesses, they will endure to comply. There’s also concern it will negatively impact job creation, economic growth and business investments.
Representatives from the National Association of Home Builders testified before the House Small Business Committee Feb. 9, expressing the need to repeal the 1099 provision. While many in Congress agree the 1099 provision could be harmful to business owners, there is concern about offsetting the $19 billion in revenue that will be lost.
The current amendment passed with broad bipartisan support in an 81-to-17 vote. The amendment would offset the cost of fully repealing the 1099 reporting requirements by directing the Office of Management and Budget to rescind $44 billion in unspent and unobligated federal dollars. The measure exempts the Departments of Defense, Veterans’ Affairs and the Social Security Administration from the cuts.
The 1099 amendment is being considered in conjunction with a Federal Aviation Administration reauthorization bill. Once that legislation is approved, the 1099 amendment will move to the U.S. House of Representatives for consideration.
For more on how 1099 requirements could affect your self-storage business, read Jeffrey Greenberger's article, 1099 Reporting Requirement: A New Compliance Problem for Self-Storage Operators?