Four new proposals to repeal the controversial expansion of Form 1099 tax reporting have recently surfaced just days after efforts to end or limit the new requirements fell short in the Senate.
Lawmakers worry the 1099 provision, which will generate an estimated $17 billion in revenue for the IRS over 10 years, may overwhelmingly increase the filing burden on businesses starting in 2013.
Despite the September 14 defeat of two amendments designed to thwart the expansion that was passed as part of the Patient Protection and Affordable Care Act , lawmakers are continuing to look for ways to eliminate or amend the changes that would require businesses to report purchases of $600 or more to the IRS.
- The Small Business Paperwork Mandate Elimination, currently in the House, seeks to fully repeal the 1099 expansion; however, a discharge petition circulated to force a floor vote on the bill hasn’t received the required 218 signatures needed for a vote.
-Another proposal in the House includes two potential revenue-raising devices. One would produce about $5.3 billion through revisions of the Grantor Retained Annuity Trust Inheritance rules. The other would raise taxes on carried interest, which is a type of compensation for private-equity managers and venture capitalists, according to the National Small Business Association (NSBA).
-A proposal in the Senate , which seeks to completely repeal the 1099 requirements and replace the revenue with surplus funds from the 2009 federal economic stimulus package.
-Also in the Senate, the Information Reporting Modernization Act would raise the threshold for businesses to file information reports to $5,000 from its current level of $600 and would index the threshold to inflation after 2012. Unlike previous proposals, this bill would not exempt businesses with fewer than 25 employees and does not include an offset to pay for the change.
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