We’re hearing more buzz that momentum is growing in Congress to repeal a new tax reporting rule in the health care reform law. The provision requires all businesses, charities and state and local governments to file 1099 tax forms with the Internal Revenue Service when they buy $600 or more from unincorporated providers. For example, if you pay more than $600 for your hotel room for four days at the NAHC convention, you’ll need to get the Tax ID number of the hotel company and issue a 1099. How much additional paperwork will that cost be?
I took a few minutes to look back over our company’s financial records to see what the impact will be on us. It will be a major pain in the … and will cost us much lost productivity.
The business community is trashing the provision, saying it will pile a massive amount of new paperwork on companies, putting a burden on small companies that can least afford it. (That’s you and me.)
But dropping the requirement will mean a loss of tax revenue. Congress will have to find another way to raise the $17 billion the provision was estimated to yield from 2012 to 2019 by making it harder for firms selling goods to understate their income to the IRS. A need for revenue was the only reason the provision was included in the $940-billion health law.
If you believe this provision of the Patient Protection and Affordable Care ACT will have a major negative effect on your business, contact your local member of congress and ask for relief.
