Congress had no problem sneaking in the now infamous 1099 expanding reporting requirements. But boy, they are having a devil of a time getting rid of it.
The new rules, which expanded the reporting requirements significantly, were originally included in the health care bill passed over a year ago. The text, at Section 9006, was included with little fanfare and, quite frankly, in the middle of such a voluminous act, was overlooked for a few months. But when taxpayers found out about it, they weren’t happy. Many taxpayers demanded repeal. Members of Congress, red-faced about the whole thing, stared at their feet and shuffled around a bit, mumbling. And they did absolutely nothing.
The deadline for public comment about the new rules came and went. Still no repeal.
The Dems and the GOP sparred over the matter publicly. Still no repeal.
The President wagged his finger at Congress over it during his State of the Union address. Still no repeal.
Measure after measure after measure was introduced to get rid of it. Still no repeal.
Finally, last month, the Senate managed, despite fighting over the health care bill, to repeal the 1099 reporting requirements.
But the House? Still no repeal.
Until now.
Just last week, the House managed to push through their own version of repeal. The bill, H.R. 4, the Small Business Paperwork Mandate Elimination Act of 2011, or its “short title” in the final version, Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act of 2011, is just a few paragraphs long. The House version of the repeal removes corporations from the pool of potential 1099 recipients and also removed the sales of goods from the bill. In addition, H.R. 4 repeals the new 1099 reporting requirements for taxpayers who receive rental income.
To pay for the repeal, which has been described as a revenue raiser, the bill would increase the amount of the new health care credit subject to recapture (part of the measure that was controversial when introduced previously). The GOP supports this provision but the Dems are not happy with it. This puts President Obama in a tough spot since he supports repeal but is said to “strongly oppose” the clawback provision.
The measure isn’t law yet. The Senate and the House versions of the repeal have some disparities (the clawback, for example) to be ironed out.
This the very, very long way of saying that, a year later, we still have the darn thing in the Tax Code. Remember to thank your Congressional representatives for this one.
