InView September 2010 Issue
ASAE Seeks Repeal 1099 Rule
ASAE is circulating a sign-on letter to its grassroots advocates that calls for Congress to repeal new Form 1099 reporting requirements in the health care reform bill that would prove burdensome for associations and other small businesses. Enacted as part of the landmark Patient Protection and Affordable Care Act passed by Congress in March, the Form 1099 requirements force all businesses and tax-exempt organizations to issue a Form 1099 to vendors from whom they buy goods totaling $600 or more annually. The change, scheduled to take effect in 2012, could result in associations having to issue hundreds or even thousands of forms each year, track cumulative payments to vendors, and obtain tax identification information from each vendor. The National Taxpayer Advocate has estimated that 40 million businesses, charities and associations would be impacted by this new requirement.
ASAE, who is working with several Congressional offices to repeal the 1099 reporting requirements, reports that momentum is gaining for a possible legislative fix. Earlier in August, the House voted 241-154 to repeal the reporting requirements, but the measure failed because the small business tax bill that included the repeal language was offered under suspension of the rules and required a two-thirds majority for passage. Senator Mike Johanns (R-NE) attempted to add an amendment repealing the 1099 requirements to the small business tax relief bill considered in the Senate, and Senate Democrats responded with an alternative amendment offered by Senator Bill Nelson (D-FL) that would exempt companies and associations with fewer than 25 employees from the 1099 requirements. For businesses with more than 25 employees, the Nelson amendment raises the threshold for reporting from $600 to $5,000 and purchases made with a credit card would be exempted from reporting requirements.
ASAE is offering a program on The New 1099 Requirement and Why It Will Impact Your Association on September 15 from 1:30-2:30 PM at the ASAE Conference Center in Washington, DC. Presenting will be Charles Tate CPA, managing partner of Tate & Tryon CPAs and Consultants, as well as Debbie Kosnett and Subrina Wood, also of Tate & Tryon. Attendees can participate in person or by phone. More information and registration can be found here.
Additional Articles