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Will new 1099 requirements disappear before they take place?

Posted by Admin Posted on Nov 15 2010

One of the revenue raisers in the Health Care reform legislation was a new requirement that all business taxpayers send a Form 1099 to every vendor to whom they pay $600 or more for goods and services.  Before this change, Form 1099 was not required for sales of tangible property, and were only sent to certain kinds of taxpayers.

There's been a sustained outcry about the cost and administrative burden of this position.  A letter in this week's Acoounting Today points out that almost nobody reconciles the 1099's they receive to gross revenues, so the burden is only on sending them out.  Of course, there is also a potential burden on taxpayers who have not reported all of their income -- but it's kindof hard to have sympathy for this group.

Sen Max Buacus (D-MT), Chair of the Senate Finance Committee, announced on Friday that he would introduce legislation to repeal this requirement.  He did not say where he would find revenue offsets.

Form 1099 must be mailed to the payee by January 31, 2011, and filed with the IRS by February 28, 2011.  Given the short timeframe, taxpayers are well advised to continue making plans to comply with 1099 rules - primarily rounding up taxpayer identification numbers and mailing addresses from vendors.

 

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