Q. What is the new IRS form 1099 reporting requirement that small businesses have to report any expense over $600?
A. During the health care debate of a year ago, I highlighted the cost of various proposals on small businesses, both in terms of their ability to provide health care to their employees and the regulatory burden imposed on them by the new health care regime. One provision expands the requirement that all businesses, governments and nonprofits file, with the IRS, information on all purchases totaling $600 or more from any business, now including corporations. The new rule also requires reporting the purchase of goods and property. These reporting requirements will create a major burden on small businesses because they dramatically increase bookkeeping and tax preparation costs.
Q. Why was this change made?
A. The provision was included in the health care overhaul because it was estimated to raise more than $17 billion in revenue that could be used to pay for health care reform, despite the fact that the provision had nothing to do with health care.
Q. Can it be changed?
A. I support bipartisan legislation, sponsored by Senator Mike Johanns of Nebraska, to repeal the new provision. Recently, Senator Johanns offered his legislation as an amendment to the small business bill. The amendment did not pass. I’ll keep working to repeal this new provision and relieve the burden it put on small businesses. The last thing we should be doing right now is increasing the heavy hand of Washington on the job-creating engines of America’s economy.