Friday, July 30, 2010
Small Biz Group Launches Campaign to Stop 1099 Mandate
The Small Business & Entrepreneurship Council has launched a petition and action center devoted to repealing what it calls "a nightmarish paperwork mandate" that expands 1099-Misc reporting.
SBE Council President & CEO Karen Kerrigan said small business owners are outraged by the provision, and want to know everything they can do stop it from taking effect in 2012. The group has launched www.stop1099.org.
"This expanded 1099 reporting mandate has really gotten under the skin of small business owners, and rightly so," said Kerrigan. "The burden of the new mandate will be tedious, time-consuming, and costly. Business owners across the country are furious that Congress slid the measure in a massive health care bill without understanding its deep impact."
A provision (Section 9006) in the "Patient Protection and Affordable Care Act" signed by President Barack Obama in March mandates that all businesses issue a 1099 form for all vendor payments totaling $600 or more on an annual basis. This new mandate vastly expands current requirements, and is scheduled to begin in 2012.
The provision was included in the health care bill as a revenue raiser ($17 billion), but there has been no analysis completed to demonstrate how effective the measure will be at closing the "tax gap," Kerrigan said.
"I really don't know if Congress thought about the unintended consequences of the mandate, whether the IRS has the capacity to deal with hundreds of millions of new forms from 30 million businesses, the cost impact it will have on small business owners, and the economy-wide effect of this extensive paperwork burden," she said.