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Tax Bill Passes With 1099 Repeal Not Included

Barring unexpected action, Congress will adjourn having failed to repeal the expanded 1099 requirement that is part of the healthcare law. Effective in 2012, the...
December 21, 2010

Barring unexpected action, Congress will adjourn having failed to repeal the expanded 1099 requirement that is part of the healthcare law. Effective in 2012, the 1099 provision would require businesses of all sizes, as well as governments and nonprofits, to file a 1099 form with the Internal Revenue Service reporting any purchases they make of goods or services of $600 or more in a tax year from any individual or business, including corporations.

Multiple attempts over the past several weeks to pass a repeal of the expanded 1099 requirement failed - despite overwhelming support for repeal in both the House and the Senate. Amendments by Sen. Mike Johanns (R-Neb.) and Sen. Max Baucus (D-Mont.) were both defeated. Action on the issue fell victim to Washington politics, with both parties wanting to take credit for the repeal. There is also disagreement over how to recover any lost revenue resulting from a repeal.

The upcoming Republican-led House of Representatives has vowed to repeal this language next year, before its implementation on January 1, 2012. The Senate, too, has pledged to act.

What It Means to Agents: PIA will continue its campaign to have the expanded 1099 requirement repealed. This reporting requirement places an onerous burden on small businesses, including independent insurance agencies. Repealing it should be the first order of business when Congress reconvenes in January.

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