On January 25, Max Baucus, Senate Finance Committee Chairman (D-MT) and Harry Reid, Senate Majority Leader (D-NV) introduced a bill that if enacted would repeal the recent Form 1099 reporting requirements for businesses that would have otherwise become effective commencing in 2012. The bill would repeal the expanded requirements for businesses to report payments made for goods and certain services above the existing requirements. The Act being repealed has been widely maligned by businesses who fear the new paperwork requirements would be too cumbersome and too costly to complete the extra 1099 forms.
If this bill does not become law, Sec. 9006 of the recently enacted Patient Protection and Affordable Care Act would require payments of amounts in consideration for property and goods would be added to the list of payments required to be reported. It would also provide that starting in 2012, payments to taxable corporations which had previously been exempt from the Form 1099 reporting requirement, would become subject to the Form 1099 requirement.
This Bill comes as a major relief to businesses and conversely as a blow to accountants and payment processors who would have enjoyed new business coming from the extra reporting requirements.