President seals deal on Form 1099 repeal

| 4/15/2011

The repeal of a burdensome IRS Form 1099 reporting requirement was signed into law on Thursday, April 14, following decisive votes in both the Senate and House.

The Senate voted in favor of HR4, the Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act of 2011. The bill passed the House with a similarly lopsided vote of 112-15 on March 4.

While the votes on this particular bill may lead some to think that repealing the 1099 requirement was a slam dunk, it was anything but.

Buried deep in the Patient Protection and Affordable Care Act – a 906-page law – was the new requirement for all business owners. It would have required them 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 have amounted 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.

Rep. Dan Lungren, R-CA, took more than one swing at the reporting requirement, first introducing HR5141 last year, which was rejected outright, and then introducing HR4 at the beginning of the current Congressional session. And he wasn’t alone. Many lawmakers, both Republican and Democrat, attempted to get legislation passed to repeal the requirement.

The requirement was passed in the health care legislation as a way to generate revenue to help pay for various requirements within the health care bill. It was essentially new revenue in the mind of Lungren.

In a recent House Small Business Committee hearing, Lungren stood strong on his point of “you can’t replace what you don’t have.” Estimates ranged widely on what the requirement would gain in terms of revenue. But the estimates were also consistently showing it to be a huge regulatory burden on small businesses.

The Owner-Operator Independent Drivers Association was against the requirement from the get-go. The Association lobbied members of Congress and issued several “Calls to Action” to its membership calling on members to pressure Congress into repealing the requirement.

Lungren’s bill enjoyed full OOIDA support during its journey through the House and Senate.

Executive Vice President Todd Spencer said the outpouring of opposition from the OOIDA membership delivered that key message to lawmakers, spurring the passage of HR4 into law.

“Today is a great day for small businesses across the country. Especially those owner-operators who make their living driving the highways of America,” Lungren told Land Line following the passage of HR4.

“The placement of this tax provision into the government run health care law was ill advised. This provision demonstrated that the bill’s authors did not consider the people who make America run and those who lay awake at night trying to figure out how to make payroll.”

And now that it’s been signed by the president, OOIDA continues to praise Lungren’s efforts as well as thank OOIDA members for their strong opposition to the requirement.

“It is certainly a relief to small-business truckers,” Spencer said. “They’re already contending with a myriad of overly burdensome and costly regulations. The new 1099 requirements could very well have been the proverbial straw that broke the camel’s back for many truckers.”