Update: On April 14, 2011, President Obama signed this measure into law.
The highly contentious expanded 1099 information reporting requirement is a step closer to becoming law. On Tuesday, the Senate voted overwhelmingly in favor (87-12) of the Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act of 2011 (H.R. 4), a bill that repeals the provision included in the health care reform law requiring employers to report all payments to corporations for goods or services of $600 or more. The legislation would also repeal a similar expansion of information reporting for owners of residential real estate who rent out that property, and increase the maximum amount of health care subsidy overpayments that an individual must repay. The House passed this measure last month.
Introduced by Rep. Daniel Lungren (R-CA), this bill has enjoyed a significant amount of bipartisan support. Since the reporting requirement’s inclusion in the Affordable Care Act, representatives of the business community as well as the IRS have criticized the move, claiming the reporting obligation would impose an undue administrative burden on all parties involved. Even President Obama during his State of the Union address called for the provision’s repeal. This legislation is expected to be signed into law within the week.