Letter to Congress seeks to Repeal New 1099 Reporting Requirements

Recently, the U.S. Chamber of Commerce initiated an effort with more than 1,000 local Chambers of Commerce, business associations, and companies of varying sizes in composing a letter to Congress calling for a repeal of the 1099 reporting mandate that is part of the new health care law. This tax filing requirement imposes a significant burden on nonprofits, governments, and especially small businesses.

"The 1099 reporting mandate will impose substantial
reporting and paperwork requirements on these entities,
with the largest burden falling on small businesses,
who may have limited resources."

"By including this burdensome reporting requirement in the health care bill, Congress prioritized regulation ahead of job creation," said Bruce Josten, Executive Vice President of Government Affairs at the U.S. Chamber. "Small businesses will now have to spend time and money implementing new accounting systems and filling out stacks of forms instead of growing their businesses and hiring new employees."

The letter emphasizes the business community's commitment to repealing Section 9006 of the Patient Protection and Affordable Care Act prior to it going into effect in 2012.

What impact could this have on your small business?

     • Forty million entities - including businesses of all sizes, nonprofits, and governments will be required to    report to the IRS on virtually all non-credit card purchases totaling $600 or more from any vendor in a tax year;

     • The 1099 reporting mandate will impose substantial reporting and paperwork requirements on these entities, with the largest burden falling on small businesses, who may have limited resources;

     • Compliance will require these entities to institute complex record-keeping systems that can track every purchase by vendor and payment method;

     • This provision will dramatically increase accounting costs, expose businesses to costly and unjustified IRS audits, and subject more small businesses to the challenges of electronic filing.

Take Action - Sign the Petition to Congress

Take action today! Read the letter sent by the United States Chamber of Commerce to the United State Congress and if you are inclined, please sign the petition. To read the letter or to become a signatory, click here.

If you would like clarification on any of the points made in the letter or on how this new reporting mandate could affect you and your small business, please call Faw, Casson & Co., LLP at 302-674-4305 or 410-213-8700.