Uncertainty Exists for New Form 1099 Reporting Requirements

August 31, 2010

Joe Kovacs
Marketing Director
jkovacs@grfcpa.com
301-951-9090

The Health Care Reform law passed earlier this year sets new requirements for businesses and nonprofits that submit Forms 1099 to the IRS as part of their annual tax reporting. The rule, which goes into effect on January 1, 2012, has raised concerns that the amount of required Form 1099 reporting will place an additional burden upon them.

The new legislation has raised such concerns that some stakeholders are calling for the repeal or modification of the current requirements. As reported by the Bureau of National Affairs’ Tax and Accounting Center, the U.S. Chamber of Commerce announced that more than 1,000 companies are formally requesting repeal of the new rule. The Center on Budget and Policy Alternatives has asked for a “scale back” of the requirements. 

Previous appeals to Congress to reconsider the rule have been unsuccessful but the U.S. Senate is due to reconsider the Form 1099 requirements on September 14. At that time, it plans to consider a small business bill (H.R. 5297).

Gelman, Rosenberg & Freedman is closely monitoring developments regarding the new law and its potential impact on clients. We believe it is premature to make recommendations based on the current language as modifications to the rule are still possible.

On the other hand, we recognize that our clients are already concerned about the potential impact of the legislation. Once Form 1099 requirements are finally established, we will submit a list of recommendations to you and other stakeholders to ensure the rule does not present an unreasonable burden to your organization. We will also be available to directly assist you.

In the meantime, if you have any questions about the current language or requirements, please contact Troy Turner, CPA at 301-951-9090 or tturner@grfcpa.com.

*This article was distributed as a Client Alert on 8/31/10. If you would like to receive similar Alerts by email, please let us know at marketing@grfcpa.com.