GOP Blocks Move To Add Repeal of 1099 Provision to Tax Cut Legislation

Republicans recently blocked an attempt by Democrats to attach a repeal of the 1099 tax-reporting provision in the federal health reform law to current tax cut legislation, Politico reports (Kliff/Haberkorn, Politico, 12/13).

Background on 1099

The reporting mandate -- scheduled to take effect in 2012 -- requires businesses, not-for-profit groups and government offices to file 1099 forms with the Internal Revenue Service when they purchase $600 or more in goods or services from another business in a given year. The law previously required 1099 forms only for services above that amount.

In recent months, the provision has drawn strong criticism from Democrats and Republicans, the business community and even the White House. A number of business groups and President Obama have criticized the requirement, saying that it would be burdensome to companies and also counterproductive.

Several attempts to repeal the provision have failed in both chambers (California Healthline, 11/30).

Latest Developments

Democrats sought to add the repeal to the Republican-supported tax cut bill. However, the GOP opposed any add-ons to the tax cut measure.

A Republican aide said that the 1099 repeal "wasn't part of the original framework" of the tax cut bill, "and nobody involved in the negotiations allowed any add-ons."

Politico reports that representatives of both parties said they will continue to work on repealing the 1099 provision (Politico, 12/13).