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Support for repeal of 1099 provision in health care bill

Tuesday, February 1, 2011   (0 Comments)

Both the Senate and the House have drafted bills to repeal Section 9006 of the 2010 health care bill (The Patient Protection and Affordable Care Act; H.R. 3590). This small paragraph within the Act, completely unrelated to health care, amends Section 6041 of the Internal Revenue Code by requiring all organizations to begin reporting payments to corporations and payments for merchandise beginning in 2012. Historically, these two items have been primarily exempt from 1099 reporting requirements.

The new requirements, which finally caught the attention of lawmakers who apparently overlooked the section when the health care legislation was passed, place a huge new burden on organizations, including small businesses. However, the burden would pertain to non-card payments since card payments now have 1099 reporting relief. (Recall that final regulations for IRC Section 6050W, released in August 2010, state that transactions reportable under both IRC Section 6041 by end-user organizations and 6050W by the acquiring community are reportable only under 6050W, effective 2011.) 

Efforts to repeal Section 9006 have bi-partisan support, including support by President Obama. The NAPCP will continue to monitor activity related to repeal efforts.  

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