Today U.S. Congressman Sam Johnson (3rd Dist.-Texas) took two whacks at ObamaCare when he voted to repeal the onerous and unpopular 1099 regulation and to tackle overpayments in the exchange program.
Today the Ways and Means Committee voted to abolish the 1099 paperwork requirement and paid for the measure by forcing people to pay back money to the exchange who received the money in error. The bill now heads to the floor of the House for a full vote where it is expected to pass. The Senate has passed similar legislation.
“Main Street Mom and Pop shops do not need the added cost of more regulatory requirements at a time when their efforts are rightly focused on staying in business,” said Johnson.
Currently, IRS Form 1099 is used by free-lancers and by companies to document income for individual workers other than wages and salaries. Starting in 2012, this tax hike on doing business/ reporting mandate will force all businesses, charities, churches, and state and local governments to file a 1099 tax form with the IRS every single time they purchase $600 or more in goods from other businesses throughout the year.
The stealth change radically alters the nature of 1099s and means businesses will have to issue millions and millions of new tax documents each year. Experts predict that as many as 40 million businesses across the country will be forced to comply with this burdensome and time-consuming requirement.
The National Association for the Self-Employed reports that the new healthcare law will have a particularly burdensome impact on small business. Specifically, for those companies with 10 or fewer employees, their paperwork burden will jump from an average of two 1099s per year to roughly 27 per year, mostly to large corporations, a 1250% increase.
Locally, Highland Fire Protection Company in Anna averages 12 1099s each year. An increase of 1250% translates to 150 1099s per year! As Glenda Pinkston, the owner of Highland Fire Protection Company puts it, the 1099 reporting requirement will “impose undue hardships on already overworked employees and/ or business” and “the gain in taxes would be greatly offset by the cost to businesses and government to implement it.”
