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Tax and Legal Update
Repeal of New Form 1099 Requirements Picks up Steam
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ncluded in the new Health Care law to raise revenue, enhanced information reporting requirements to go into effect in 2012, so far have raised more outrage than revenue, and Congress now is moving toward repeal. In addition, the House has included in its repeal legislation new reporting provisions for landlords that already have gone into effect in 2011. Form 1099s currently are required to be filed by businesses when they make payments to individuals aggregating more than $600 during the year for income items such as services. Beginning in 2012, however, reports also will be required for payments to corporations, and for payments for property as well as income items. The specter of billions of additional Form 1099s for such items as 24 MOBILITY/MAY 2011
supplies purchased from Office Depot, and the enormous recordkeeping burden this might entail, has the business community, large and small, up in arms. Filing a Form 1099 for this broad new category of required reports would necessitate a business obtaining a taxpayer information number from everyone to whom it makes payments during the year, and maintaining records necessary to determine whether payments to each recipient exceeded $600 during the year. In the mobility industry, this would impose significant new burdens related to supply chain management. Further, as a revenue raising provision included in the Jobs Act of 2010, Congress imposed new information reporting requirements for
individuals who rent out their property. Beginning this year, such individuals must file Form 1099s for payments aggregating over $600 to individuals for such items as maintenance and repairs and, in 2012, will become subject to the enhanced requirements discussed above. Congress is listening to the complaints. Although repeal efforts in the Senate failed late last year due to differences as to how to replace the $19.3 billion in revenue the Joint Tax Committee says would be raised over 10 years, they have escalated in the new Congress. On February 2, the Senate voted 81-17 to attach an amendment repealing the information reporting requirements imposed by the Health Care law to legislation that would reauthorize the Federal Aviation