Schock Statement on Senate Passage of 1099 Repeal
Washington,
Apr 5, 2011 -
Congressman Aaron Schock (R-IL) made the following statement after the Senate voted overwhelmingly to remove the 1099 tax reporting provision from President Obama’s signature health care legislation by a vote of 87-12:
“Today’s vote in the Senate is a huge victory for individuals and small business owners throughout Illinois and our country. Following the House’s lead, the Senate continued the effort to have the 1099 provision repealed before it has the chance to impact one small business owner in our country. This is another step toward our country focusing more on W-4’s than 1099’s and that’s a good thing for all of us.
“It’s unfortunate that Congress had to dedicate so much time to a provision that likely wouldn’t have been included in the final health care bill if it wasn’t rushed through Congress. This is one of many steps we will take to remove provisions and make changes to the overall health care law.
“I call on President Obama to sign this repeal immediately and remove this burdensome provision from the current health care law.”
At the center of this controversy is a provision that expanded tax information reporting requirements to require businesses to issue a 1099 Form for any payments to corporations and for any payments for property that exceeds $600 per year per payee. This requirement would have caused a huge tax compliance burden on small businesses, forcing them to devote resources to tax filing instead of to business expansion and job creation.
According to the National Federation of Independent Business (NFIB) this provision would have a “direct negative impact on small businesses.” The Internal Revenue Service’s own National Taxpayer Advocate highlighted significant problems with this requirement. In a report, they expressed “concern that the 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.”
Removing the 1099 provision has received wide spread support from both Republicans and Democrats; even President Obama signaled he was willing to see this provision removed from his own signature health care law. During his most recent State of the Union address, President Obama stated that “We can start right now by correcting a flaw in the legislation that has placed an unnecessary bookkeeping burden on small businesses.”
