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Breaking News


NNA applauds house action to roll back 1099 reporting rule




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March 7, 2011, 1:04pm
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The National Newspaper Association today applauded a 314-112 vote in the U.S. House of Representatives to roll back onerous new tax reporting requirements. NNA President Elizabeth K. Parker, co-publisher of Recorder Community Newspapers Inc. in Stirling, NJ, said the vote was a step forward.

The House approved H.R. 4, sponsored by Rep. Daniel Lungren, R-CA, to restore requirements for tax form 1099 that were in place before the health care reform legislation dramatically ramped up the reporting rules.

Parker said, “The House recognized that this new burden on small businesses during the nascent economic recovery would add costs at the wrong time, deplete jobs and increase the paperwork both in our businesses and at the Internal Revenue Service. Congress wisely revisited that issue today, and restored business to a common-sense requirement.”

The 1099 rules, unless repealed, would require businesses to report expenditures with virtually any business if more than $600 per year was spent. Streams of new paperwork have already begun in American commerce as large corporations have begun to push out requests for tax identification numbers, in an effort to be ready for compliance with the new rule by 2012. The original rationale behind increased reporting was to collect tax revenue from scofflaws. But Parker noted that even IRS had admitted that the flood of paperwork about to flow into the agency would be unmanageable.

Though the Senate has also voted to roll back the new requirements, the House and Senate bills do not match in the manner by which Congress would off-set the revenue it expected to get from new 1099 reporting. The White House has said it opposes the House bill’s method of paying for the roll-back.

Parker urged the Senate to pass HR 4 and send the repeal bill to the President as soon as possible, and said she hoped President Obama would quickly sign the legislation.

“The compliance cost for the 1099 ramp-up has already hit small businesses. We need prompt action to turn this effort off before even more money is lost,” she said.
 


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