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Producers Optimistic Congress Will Repeal New 1099 Requirement

Insurance producers are optimistic they will win the repeal of a tax provision in the health reform act they see as overly burdensome for small...
November 16, 2010

Insurance producers are optimistic they will win the repeal of a tax provision in the health reform act they see as overly burdensome for small businesses. In an article in A.M. Best's Best Wire, PIA National Director of Federal Affairs Mike Becker said it would be better to pass the 1099 provision sooner rather than later. "If an agreement can be reached, it would be more advantageous to pass a repeal during the upcoming lame-duck session, allowing the IRS ample time to scrap any administrative changes they were starting to make in advance," Becker said.

Section 9006 of the act requires that all businesses, nonprofit entities and governments file a 1099 form with the Internal Revenue Service reporting any purchases of goods or services of $600 or more in a tax year. The provision is due to take effect in 2012. In addition to PIA, groups fighting for repeal of the provision include the U.S. Chamber of Commerce and the National Federation of Independent Businesses (NFIB).

Senate Finance Committee Chairman Max Baucus (D-Mont.) said November 12 that he will introduce a bill to repeal the 1099 mandate. Baucus wrote in a statement that he has "heard small business loud and clear and I am responding to their concerns." Previously, President Barack Obama said he would consider changes to the 1099 reporting requirement in response to widespread criticism.

Click here to read Producers Optimistic on Repeal of 1099 Reporting Requirement (BestWire 11/9/10)