Repeal 'onerous' IRS rule: Lawmakers

By Catherine Clifford, staff reporter


NEW YORK (CNNMoney) -- Now that House Republicans have had their token show-vote on the health care law, Congress is turning its attention to one small provision that everyone agrees should be repealed.

On Thursday, three Senate Democrats wrote to House Speaker John Boehner urging the House to vote to repeal the so-called 1099 provision, a hated IRS rule that imposes new paperwork burdens on businesses.

The senators said they "are confident that the Senate can quickly act" on the repeal once the House has moved it along.

"The [1099 provision] is particularly onerous for small businesses ... who cannot afford to employ extra lawyers and accountants to comply with the new rules," Senators Ben Nelson, Maria Cantwell and Amy Klobuchar wrote.

Beginning in 2012, all companies will have to issue a 1099 IRS form not only to contracted workers, as they now must do, but also to individuals or corporations from which they buy more than $600 in goods or services in a year.

The 1099 form is used to document income for individual workers other than wages and salaries: Freelancers get them and businesses send them out.

Under the health care law, the 1099 form would be used to track payments for services and tangible goods. Also, it requires that 1099s be issued not just to individuals, but to corporations as well.

The new mandate has drawn sharp criticism from the business community, politicians and even President Obama. In November, President Obama pledged that he would support a repeal of the provision.

Republican Rep. Dan Lungren of California introduced a bill, called the "Small Business Paperwork Mandate Elimination Act of 2011," to repeal the provision on the House.

"The engine of our economy is small business -- and we cannot afford to do anything that would stall our economic recovery," said Lungren in a written statement. "We should be supporting policies that contribute to job growth, not imposing yet another new government mandate on the backs of small business owners."

Last fall, Congress was unable to muster enough votes to repeal the provision -- once in September and again in November.

The goal of the provision was to raise revenue to pay for health care reform. The government misses out on an estimated $300 billion each year from tax underpayment.

The repeal would cost $19.2 billion between 2011 and 2020, according to an estimate from the Joint Committee on Taxation. To top of page

Just the hot list include
Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Questions & Answers



QHow does a florist sell more in this economy? We changed our business to designing weddings and events only, as the everyday flowers are not selling. We had to throw out too much product at the end of the week -- flowers are perishable! More
Get Answer
- The Flower Lady, Suwanee, Ga.
Overnight Avg Rate Latest Change Last Week
30 yr fixed3.80%3.88%
15 yr fixed3.20%3.23%
5/1 ARM3.84%3.88%
30 yr refi3.82%3.93%
15 yr refi3.20%3.23%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
Sponsors

Sections

Bankrupt toy retailer tells bankruptcy court it is looking at possibly reviving the Toys 'R' Us and Babies 'R' Us brands. More

Land O'Lakes CEO Beth Ford charts her career path, from her first job to becoming the first openly gay CEO at a Fortune 500 company in an interview with CNN's Boss Files. More

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.