Well, that's that.
President Obama has signed into law a measure that repeals those onerous and expanded Form 1099 reporting requirements that were included in the 2010 health care reform law. The move came shortly after Congress voted to repeal the unpopular requirements.
The Journal of Accountancy offers the key details:
“In March 2010, the Patient Protection and Affordable Care Act (PL 111-148) (part of the health care reform legislation) expanded the 1099 reporting requirements to include all payments from businesses aggregating $600 or more in a calendar year to a single payee, including corporations (other than a payee that is a tax-exempt corporation), and to include payments made for property, starting with payments in 2012. The 1099 Act repeals the expansion to payees that include corporations by removing IRC § 6041(i). It repeals the expansion to cover payments for property by removing the language 'amounts in consideration for property,' and 'gross proceeds' from section 6041(a). The act also removes IRC § 6041(j), which granted the Treasury secretary authority to issue regulations under section 6041, including 'rules to prevent duplicative reporting of transactions.' These changes are effective for payments made after Dec. 31, 2011 (when the new rules were to take effect), and they revert those portions of section 6041 to how they were before the Patient Protection and Affordable Care Act.”
The JofA continues:
“As a result of the repeal, the 1099 reporting rules continue unchanged: Namely, under IRC § 6041(a), 'All persons engaged in a trade or business and making payment in the course of such trade or business to another person' of $600 or more must report the amount and the name and address of the recipient to the IRS and to the recipient. The Code applies this requirement to payments of 'rent, salaries, wages, premiums, annuities, compensations, remunerations, emoluments, or other fixed or determinable gains, profits, and income,' and the Treasury regulations add, 'commissions, fees, and other forms of compensation for services rendered aggregating $600 or more' as well as interest (including original issue discount), royalties and pensions (Treas. Reg. § 1.6041-1(a)(1)(i)).
“This required information must be reported each calendar year for payments made during that calendar year.”
That was a nice effort from Team CPA on this one. Kudos to all who helped beat back yet another round of bad legislation.