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Congress Approves 1099 Repeal Bill; Obama Expected to Sign

President Obama is expected to sign into law the Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act of 2011.  This Act will repeal the controversial expanded information reporting requirements that were part of the Patient Protection and Affordable Care Act (PPACA).  This Act will also repeal the rental property expense payment reporting requirements that were enacted in September, 2010 as part of the 2010 Small Business Jobs Act (SBJA).

The PPACA required businesses to file a Form 1099 when they make annual purchases aggregating $600 or more to a single provider of goods or services.  The PPACA had also repealed the long-standing reporting exception for payments made to corporations.  These additional reporting requirements were to go into effect on payments made after December 31, 2011.  The (SBJA) required information reporting by landlords on Form 1099 of certain rental property expense payments of $600 or more in conjunction with their rental properties.  This would have applied, for example, to payments made to repairmen, plumbers and roofers.  This was to go into effect for payments made after December 31, 2010.

Once signed into law, these burdensome informational return reporting requirements will be repealed.  The IRS has estimated approximately 40 million taxpayers, including self-employed individuals, small businesses and charitable organizations, would be affected by the bill's passage.

If you would like to discuss this topic in detail, please contact your Alpern Rosenthal Business Advisor.

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