On Feb. 17, the U.S. House Ways and Means Committee approved two pieces of legislation, H.R. 4, the “Small Business Paperwork Mandate Elimination Act of 2011,” and H.R. 705, the “Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act of 2011,” which repeals the 1099 reporting mandate in the new health care law.
The reporting mandate required small businesses to file a 1099 form with the IRS for every vendor they pay more than $600 in a year and created a heavy burden for small businesses through unnecessary paperwork that takes time, energy and resources, instead of helping to create jobs, according to the Automotive Service Association.
Rep. Dave Camp, R-Mich., chairman of the U.S. House Ways and Means Committee, made the following statement during the hearing:
“The legislation approved by the committee today is a victory for America’s small businesses, families and individuals. Congress should make every effort to reduce the heavy burden of paperwork that takes time, energy and resources away from creating jobs. Families and individuals who do something as common as rent out a room and either replace an appliance at their rental property or pay a lawn service should not have to worry about the added headache of reporting that transaction to the IRS.
“We took a fiscally responsible path to achieve this relief by reducing waste, fraud and abuses from the Democrats’ health care law, which also allowed us to reduce the deficit. I look forward to consideration of this legislation by the House very soon so that all those affected by the uncertainty of these provisions can breathe a long-awaited sigh of relief.”