Wednesday, April 06, 2011

1099 Legislation

Congress has passed the "Comprehensive 1099 Taxpayer Protection and Replacement of Exchange Subsidy Overpayments Act of 2011" which repeals the controversial expanded information reporting requirements.  In March 2010, Congress passed the Patient Protection Act which included a provision requiring businesses, charities and governmental entities  to file Form 1099 when they make annual purchases aggregating $600 or more to a single provider of goods (other than tax-exempt organizations).  This provision also repealed the long-standing rule that exempted payments made to corporations.  The Patient Protection Act, generally, provided that this provision would be effective for payments made after December 31, 2011.

When this bill was passed it would have created unnecessary  bookkeeping burdens on businesses.  Congress has previously discussed the repeal of this provision.  On April 5, 2011 the Senate approved the repeal that was previously  approved by the House of Representatives on March 3, 2011.  Since both bills are identical there is no need for the bills to go to a conference committee and will therefore be sent directly to the President.  It is expected that the President will sign this bill into law shortly after he receives it.