In The News

Burdensome Form 1099 requirement still in play, for now

A pair of amendments aiming to rein in a newly adopted IRS Form 1099 requirement that would bury small-business truckers – along with the small-business community – under a mountain of paperwork did not get needed support during a Senate debate Monday.

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.

The IRS has acknowledged that some payments made by credit card would be exempt from the reporting requirement, but did not clearly define what transactions would be subject to the requirement.

Two different proposed amendments would have eliminated the additional Form 1099 reporting requirements. One offered a way to make up for the lost revenue that eliminating the requirement would create; the second option sought to nix the whole idea.

Both amendments failed to get the needed votes to be added to a food safety bill that was being debated on the Senate floor. The food safety bill ultimately passed out of the Senate on Tuesday, Nov. 30, without either of the amendments.

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 Monday.

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.

“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 a solution to the new reporting requirement will likely not be reached until next year when the new congressional session begins.

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