Begich Pushes to Repeal IRS Requirement on Small Business
Amendment stops expanded information reporting requirement
In an effort to ease the paperwork burden on Alaska’s small businesses, U.S. Sen. Mark Begich has introduced an amendment to repeal the expansion of information reporting requirements to the Internal Revenue Service (IRS) for payments of $600 or more.
The proposed amendment to the Small Business Jobs Act and Credit Act repeals a requirement in the new health care law which would require businesses to file a disclosure, known as a Form 1099, to the IRS for payments to a vendor that are more than $600 in a tax year. Begich proposes to pay for the projected loss of revenue from the 1099 repeal by using unobligated dollars from the American Recovery and Reinvestment Act (ARRA). His proposal would not affect already funded or obligated Recovery Act projects.
“The last thing we need to do is put more paperwork requirements on Alaska’s small business owners, who are working everyday to keep their doors open and employees on the job,” Begich said. “I supported the health care bill in part to help small business owners provide health coverage for their employees through tax credits and other means. We want health reform to work for small businesses, not burden them.”
Begich and 11 other senators expressed strong concerns over the 1099 provision in a July letter to IRS Commissioner Douglas Shulman, asking the agency to reduce the paperwork reporting provisions and protect small businesses from unnecessary forms and administrative costs.
Begich filed his repeal amendment on Monday, along with Sen. Ben Nelson of Nebraska, when it became clear two other proposals to help small businesses would not muster enough votes for passage. Those amendments failed today on the Senate floor; a vote is not yet scheduled on the Begich amendment.
Existing law applies Form 1099 reporting requirements to the value of purchased services, but the new law expands the requirement to goods purchased. Beginning in 2012, the new law expands business tax reporting requirements for annual purchases valued at $600 or more.
Besides repealing expanded reporting, Begich’s amendment further protects business owners already paying their fair share by requiring the IRS to improve compliance with existing law.
Begich said the Small Business Jobs and Credit Act has enormous benefits to small businesses including $12 million in tax credits and is the perfect opportunity to help them further by getting rid of the expanded 1099 requirements.
Posted: September 14, 2010