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Amendments modifying Form 1099 requirement rejected

Neither of the amendments aimed at limiting a new IRS Form 1099 requirement gained the votes needed to be added to a larger small-business bill being debated in the Senate on Tuesday, Sept. 14.

The Patient Protection and Affordable Care Act – a law also known as the Health Care Overhaul Bill – included a new requirement for all business owners to submit a separate 1099 form for all business-to-business transactions that total more than $600, either in a single transaction or over the course of a given year.

On Tuesday, the Senate considered two amendments, both of which offered solutions to remedy the 1099 issue. The amendments were submitted for consideration to be included in the larger small-business bill.

The first amendment was Senate Amendment 4596 authored by Sen. Mike Johanns, R-NE. It sought to repeal outright the 1099 provision in the health care bill.

In order to make up for the supposed lost revenue expected to be generated by the 1099 provision ($17.1 billion over 10 years to pay for the health care bill) the senator’s amendment exempted more people from the requirement to buy health care insurance, while also delaying funding for a Wellness Prevention Fund included in the health care bill.

Johanns’ amendment failed on a vote of 46-52.

The second amendment was Senate Amendment 4595, authored by Sen. Bill Nelson, D-FL. It sought to curtail the 1099 provision of the health care bill by raising the threshold from $600 to $5,000 and exempting small businesses that employ 25 or fewer employees from some of the reporting requirements.

Nelson’s amendment proposed to eliminate tax incentives that might be available to oil and gas companies to help pay for the estimated lost revenue that would result in killing the form 1099 provision.

Nelson’s amendment, on a vote of 56-42, was four votes short of the 60 needed to be included in the overall bill.

OOIDA Director of Legislative Affairs Mike Joyce said that truckers need to continue to remind their lawmakers that the new IRS Form 1099 requirement is overly burdensome to small-business truckers.

For small-business truckers, that could amount to hundreds of 1099 forms every year – forms for every fuel stop, repair service, parts provider or restaurant, just to name a few – where a trucker spends more than $600 annually.

The Obama administration, Republicans, and Democrats all have agreed that there needs to be a fix to the Form 1099 proposal. That fix simply did not happen on Tuesday.

“Obviously we are disappointed one of these amendments did not get the needed votes. And although the Form 1099 requirement doesn’t take effect until 2012, OOIDA will continue to press lawmakers for a solution during the lame duck session of Congress and even on into the 112th Congress if we have to,” Joyce said. “It’s vital that truckers continue to voice strong opposition to this impending requirement and press their lawmakers for a solution.”

Joyce speculates that, ultimately, a solution to the Form 1099 reporting requirement could be a combination of the two amendments that failed today.

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