Today, the House passed legislation Congressman Bill Shuster cosponsored to repeal a useless and burdensome mandate on small businesses contained in the health care law.
The House acted to repeal Section 9006 of the health care law, which requires anyone with a trade or business to file an IRS 1099 form for vendors with whom they do $600 or more in business in a given year. For America’s small businesses this requirement, which would go into effect next year, is nothing more than a paperwork and compliance nightmare.
“As a former small business owner I know the burden wasteful paperwork can have on productivity and administrative costs,” Shuster said. “Our focus should be on making it easier for small businesses to invest, create jobs, and grow our economy. The 1099 reporting requirement in the Obamacare bill is another example of burdensome federal regulation and I enthusiastically voted for its elimination.”
Shuster is not alone in his opposition to the 1099 reporting requirement. Even the Internal Revenue Service’s own National Taxpayer Advocate noticed its negative impact on small businesses. In July the Advocate reported that “[T]he new reporting burden, particularly as it falls on small businesses may turn out to be disproportionate as compared with any resulting improvement in tax compliance.” And that “[S]mall businesses that lack the capacity to track customer purchases may lose customers, leaving the economy with more large national vendors and less local competition.”