Congress Struggling With Repeal Of 1099 Tax-Reporting Requirement

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imageA bill that would repeal a provision of the Affordable Care Act deemed a “mistake” by President Obama remains stalled in Congress as it struggles with 2012 budget differences. Repealing the provision, which requires small businesses, including physicians, to file an IRS 1099 form for each vendor purchase of $600 or more, would result in a tax revenue loss of $19 billion.

The bill has already passed both the House and the Senate this year, with more than three-quarters of Congress showing support. In his State of the Union speech on January 25, Obama said including the so-called 1099 provision in the Affordable Care Act was an error that warranted immediate rectification. "We can start right now by correcting a flaw in the legislation that has placed an unnecessary bookkeeping burden on small businesses," he noted in his address.

The Senate version of the bill, introduced by Sen. Debbie Stabenow (D-Mich.), passed on February 2; passage of Rep. Dan Lungren’s (R-Calif.) House version followed one month later. "Rather than focusing on issues that divide us, this is an issue that we can all come together on," Stabenow asserts. "If left unchecked, 40 million small businesses would see their IRS 1099 paperwork increase by 2,000%."

Entities within and outside the medical community have expressed strong support of the repeal, with the American Medical Association, the U.S. Chamber of Commerce, National Association of Manufacturers, American Farm Bureau, National Association of Realtors, and other organizations ranking among them. “It is estimated that paperwork already takes up as much as a third of a physician’s workday--time that could be better spent with patients,” asserts AMA President Cecil Wilson, MD. “This provision would only increase that burden.”