In The News

Lawmaker takes aim at new IRS reporting requirement

If a California lawmaker gets his way, a new IRS Form 1099 reporting requirement that will bury small-business truckers under a mountain of paperwork could be killed before it ever goes into effect.

Buried deep in the Patient Protection and Affordable Care Act – a 906-page law – was a new requirement for all business owners to submit a separate 1099 form for every single business-to-business transaction that totals more than $600 in a given year.

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 requirement is completely burdensome for small-business truckers,” said OOIDA Director of Regulatory Affairs Joe Rajkovacz. “The point of this requirement was to recoup millions in unreported taxes. But the cost of complying with this regulation will rapidly surpass any taxes collected.”

Rajkovacz pointed out that small-business truckers will likely have to pay an accountant to prepare all the 1099s – which could likely run several hundred dollars on top of their normal tax preparation fees.

Fortunately, there is already bipartisan acknowledgment in Congress of the need to repeal the upcoming Form 1099 requirement.

Rep. Dan Lungren, R-CA, introduced the Small Business Paperwork Mandate Elimination Act, HR5141, to repeal the 1099 provision. The bill currently has 160 co-sponsors and has been sent to the House Ways and Means Committee for consideration.

Other bits and pieces of legislation have attempted to repeal the provision, but failed because they were tied to larger pieces of legislation that could not garner votes needed to pass.

According to Washington insiders, with election season heating up there could be a delay in the passage of a fix to the Form 1099 requirement. However, since it does not go into effect until 2012, there will still be plenty of time for a repeal of the reporting requirement to be signed into law.

In the meantime, the Internal Revenue Service is accepting comments on the impending Form 1099 requirement. To read the IRS notice requesting comments, click here . Comments can be sent directly to the IRS by email to [email protected] .

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