DONE! Thank you! Sign "The Petition to Repeal Section 9006" Take Action! It's scheduled to start in 2012, but we can stop this nightmare now! Please help SBE Council repeal a measure in the new health care law that vastly expands 1099-MISC reporting requirements! Sign the petition to "Repeal Section 9006" - the expanded 1099 reporting mandate in the new health care law -- by clicking here! Update on Expanded 1099 Repeal in the 112th Congress UPDATE: April 14, 2011...President signs 1099 repeal legislation UPDATE: April 5, 2011: Can it be that the end of our 1099 battle is near? Paperwork Nightmare is Repealed in Senate Small Business Advocate Hails Passage of H.R., Urges President Obama to Quickly Sign the Bill The U.S. Senate overwhelmingly passed H.R. 4 by a vote of 87-12, a House-passed bill that repeals the expanded 1099 reporting mandate in the Patient Protection and Affordable Care Act (PPACA). H.R. 4 also repeals an expanded 1099 reporting requirement for certain rental property that was advanced as part of the "small business jobs" legislation in September 2010. Small Business & Entrepreneurship Council (SBE Council) President & CEO Karen Kerrigan heralded the bill's passage, and urged President Obama to quickly sign the repeal legislation. U.S. House H.R. 4, the bill that fully repeals expanded 1099 passed the House on March 3 (314-112). Chronology of events in 2011, thus far, on 1099 repeal in the House: • January 5, 2011: Congressman Dan Lungren (R-Calif.) reintroduced "The Small Business Paperwork Mandate Elimination Act" -- a bill to repeal the expanded 1099 mandate in the new health care law - in the 112th Congress on January 5, 2011. As of January 12, 254 House members, including 12 Democrats, have co-sponsored the legislation. House Republican leaders have moved the legislation up on the priority list with a bill designation of H.R. 4. • February 17, 2011: The House Ways and Means Committee approved two competing provisions to repeal expanded 1099 reporting in the new health care law -- one would "pay for" repeal, the other would not. The former would also repeal the expanded reporting requirement in the Small Business Jobs Act of 2010 which included expanded reporting for certain rental income. • March 3, 2011. Bill Passes! The Small Business Paperwork Mandate Elimination Act of 2011, H.R. 4, was voted on by the full House on Thursday, March 3. The final vote was 314-112, with 76 Democrats voting for the legislation. You can see if your House member voted for the bill by clicking here. Read SBE Council's media statement regarding H.R. 4 passage by clicking here. SBE Council President & CEO Karen Kerrigan joined the bill's sponsor Congressman Dan Lungren (R-Calif.) at a press conference on March 3 to urge all House members to vote for the legislation. SBE Council KEY VOTED H.R. 4 as a vote for small business for our forthcoming Ratings of the 112th Congress. (The letter can be accessed by clicking here.) U.S. Senate REPEAL Passes Senate! On February 2, the Senate passed the Stabenow amendment as part of the FAA Reauthorization bill. The amendment fully repeals the new 1099 reporting mandate. The vote was 81-17. SBE Council KEY VOTED the amendment as a vote for small business, which will be included in our Small Business Ratings of the 112th Congress. Read the KEY VOTE letter by clicking here. NEXT STEPS The House and Senate must agree to the same legislation. The ball is in the Senate's court. Majority Leader Harry Reid said he could support the House bill (H.R. 4), but other Senators prefer other "pay fors" --revenue offsets to pay for 1099 repeal. TAKE ACTION and STAY TUNED -- please contact your U.S. Senators at 202-224-3121 and urge that they support the House-passed bill (H.R. 4). Let's put this paperwork nightmare to rest!
What is the new paperwork mandate? Small business owners are familiar with form 1099-MISC and its reporting requirements. The newly expanded reporting mandate, however, takes the current burden to new and unthinkable levels! Section 9006 of the "Patient Protection and Affordable Care Act" (Public Law No. 111-148) mandates that small business owners file a 1099-MISC with the Internal Revenue Service (IRS) for payments made to vendors totaling $600 or more in a tax year. That's right every business transaction totaling $600 or more on an annual basis will now require a 1099. Get ready to track down all those TINs (Taxpayer Identification Numbers)! In turn, small business owners will receive a 1099 from each business that they sold goods or services totaling $600 or more, which will be used to report such income on their annual tax return. Section 9006 of the new health care law has nothing to do with health reform, affordability or quality coverage. It was inserted into the "Patient Protection and Affordable Care Act" as a way to pay for the massive health care bill. However, there is no clear research or data to substantiate the degree to which expanded 1099 reporting will close the so-called "tax gap." And no one really understands how the federal government will deal with the millions upon millions of 1099 forms that will flood IRS offices! The effects of this burdensome new paperwork mandate on small businesses are quite clear. New headaches, more costs, more time and manpower -- and for what? The expanded 1099-MISC requirement will be a nightmare for small businesses. As the SBA Office of Advocacy has consistently found in its research, small firms are disproportionately impacted by federal regulation - and in the case of tax compliance, these costs are 67 percent higher for small firms than for larger businesses. But for larger businesses, administrative costs and burdens will be staggering as well. Imagine all the 1099s office supply stores will receive from small business owners. Imagine the back-office policies, procedures and new staff they will need to accurately capture and store data from these tens-of-thousands, if not millions, of forms. Do you think their costs will increase? Will our supply prices go higher? Now, imagine the economy-wide impact! What about the potential errors in typing or transcribing nine-number TINS? PLEASE SIGN "THE PETITION TO REPEAL SECTION 9006" by clicking HERE What else can you do?Legislation has been proposed in Congress to repeal this misguided requirement. The "Small Business Paperwork Mandate Elimination Act" has been reintroduced in the U.S. House by Rep. Dan Lungren (R-Calif.), and was also reintroduced in the U.S. Senate by Senator Mike Johanns (R-Neb). As noted above, the U.S. Senate voted on amendment offered by Senator Debbie Stabenow (D-Mich.), which passed 81-17. (Read SBE Council's letter to Rep. Lungren in the 111th Congress, which endorsed H.R. 5171 by clicking here. Our letter to Senator Johanns endorsing S. 3578 last year can be found by clicking here. A press release can be found here.) Take Action! - Contact your Representative in the U.S. House: Is your member of the U.S. House of Representatives a co-sponsor of the legislation to repeal this onerous paperwork nightmare? Click Here to find out (look under "show co-sponsors"). If he or she is not on the bill, call them at 202-225-3121 and demand that they co-sponsor H.R. 4! If they care about small business, they will support this legislation.
- Sign the Petition: Sign "The Petition to Repeal Section 9006" and forward it to all of your colleagues, friends, family members and neighbors.
- Contact President Obama: The President says he reads letters from small business owners "every day." Please send a message to President Obama at the White House by clicking here.
Contribute to SBE Council! We need your financial support to fully repeal this nightmarish mandate. No amount is too small! Your contribution will help us collect the half-million signatures we've established as a goal for the petition; conduct media outreach; activate SBE Council members and other small business owners; and advocate on your behalf before Congress and the White House. Please support SBE Council today! Finally, please report back to us regarding your conversations with Members of Congress or their staffs. Any and all feedback and intelligence is greatly appreciated. Email us your report at: membership@sbecouncil.org. Working with you and hundreds of thousands of small business owners we can do this! We can repeal Section 9006 of the new health care law! Thank you! Karen Kerrigan, President & CEO |
