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Begich Tells Feds to Cut Paperwork Burden on Small Business

Letter to IRS Addresses Form 1099 Provision in Health Reform Law

U.S. Sen. Mark Begich today told the IRS to reduce paperwork reporting provisions found in the new health care law and protect small businesses from unnecessary forms and administrative costs.

In a letter to IRS Commissioner Douglas Shulman, Begich said the benefits of health reform for small business must not be overshadowed by a provision of the new law requiring more “Form 1099” reporting. The letter was signed by Sens. Ben Nelson of Nebraska, Jeanne Shaheen of New Hampshire and Evan Bayh of Indiana.

“As a small business owner who understands the challenges, I voted for health reform in part because of the benefits to small business owners in this country, including tax credits to help them afford health coverage for their employees,” Begich said. 

The letter also mentions support from the senators for creating a health exchange marketplace to help businesses find affordable health plans, along with an exemption from employer responsibility requirements for businesses with fewer than 50 workers.

Beginning in 2012, the new law expands business tax reporting requirements for purchases valued at $600 or more.  Existing law applies Form 1099 reporting requirements to the value of purchased services, but the new law expands the requirement to goods purchased.  It also clarifies that reporting requirements apply to payments made to corporations, not just small contractors or vendors. 

The new provision is expected to raise $17 billion between 2012 and 2020 to help pay for health reform. In addition, it will level the playing field for businesses by making it harder for competitors to not report and pay required taxes.

“However, the new requirements may place a hardship on small businesses by creating an extra paperwork burden,” the letter said. “We want health reform to work for America’s small businesses – not burden them,”

The new law includes language to “prevent duplicative reporting” and the letter says the IRS should work to reduce expected paperwork.  It also calls for the IRS to report its proposed solutions to the Senate Committee on Small Business and Entrepreneurship prior to implementing the new law.

“At this time, I don’t support attempts to repeal this part of the law,” Begich said.  “As part of our commitment to fiscal responsibility Senate Democrats insisted every dime of health reform be paid for, and this provision is part of that equation.

“I’ve heard these concerns from business owners in Alaska, and I’m listening,” he said. “As of today the IRS is on notice that it needs to make this work for small businesses – if it doesn’t, I will support a repeal of this provision of the new law.”

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