Attempt to Repeal 1099 Reporting Requirement Fails

On Monday, November 29, an attempt to repeal the Affordable Care Act’s expanded Form 1099 reporting requirement, set to take effect January 1, 2012, failed in the Senate. Despite bipartisan support, two proposed amendments failed to garner the requisite two-thirds majority, as the Senate could not agree on a way to make up the $19 billion lost over the next 10 years by the repeal, as reported by the Washington Post.

At present, businesses are required to file 1099 forms for purchases of services of $600 or more each year from unincorporated businesses, such as sole proprietorships, according to Medscape Medical News. The health care bill extends this requirement to cover purchases of property and goods in addition to services from all businesses, including corporations, MMN reported.

Sen. Max Baucus (D-MT) and Sen. Mike Johanns (R-NE) both recently introduced bills to repeal the expanded reporting requirement. While the Johanns bill sought to pay for the repeal by making up the $19 billion shortfall through unused stimulus funds, the Baucus bill did not include offsets, as reported by the American Society of Association Executives (ASAE). The Senate is not expected to take up the 1099 reporting requirement again this year.

“We are disappointed that the law was not amended,” said ABA CEO Oren Teicher. “However, ABA members participating in the Legislative Day at the upcoming Winter Institute will have an opportunity to urge members of Congress to repeal this onerous provision in early 2011.”