86 the 1099
As I mentioned in my June 2010 column, the new health care law contains an onerous tax reporting requirement that takes effect next year. Beginning in 2012, all businesses will be required to issue 1099 tax forms to all vendors (individuals and corporations) from whom they procure more than $600 in goods and services during the year.
The measure, which certainly will increase paperwork and decrease productivity, has business groups infuriated. As a result, there has been movement in Congress to repeal it.
In September 2010, Sens. Mike Johanns (R-Neb.) and Bill Nelson (D-Fla.) each tried to repeal the measure, but both failed. The issue came up again in November 2010 when Sen. Max Baucus (D-Mont.), chairman of the Senate Finance Committee, tried to pass a repeal with the support of Johanns. Once more, the effort failed.
The measure was included in the health care law in the hopes of offsetting the law's staggering costs. According to the provision's proponents, the 1099 reporting requirement will raise about $17 billion during the next 10 years.
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