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 Posted - 01/29/2011 : 20:51:13
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Brown Joins Push to Repeal 1099 Requirements
Press Releases » Press Release Brown Introduces Legislation to Cut Red Tape for Small Businesses
Brown Joins Push to Repeal 1099 Requirements to Eradicate Paperwork Burden for Ohio Small Businesses
January 26, 2011
WASHINGTON, DC —U.S. Sen. Sherrod Brown (D-OH) cosponsored bipartisan legislation that would cut red tape for Ohio’s small businesses by repealing the 1099 reporting requirement. Brown was an original cosponsor of a similar bill when it was introduced in November 2010. In September, Sen. Brown voted for an amendment offered by Sen. Bill Nelson to raise the minimum reporting threshold to $5,000. In November, he co-sponsored and voted for Sen. Max Baucus’s (D-MT) amendment to repeal the provision entirely.
“This is about cutting unnecessary red tape for small businesses – which create nearly two-thirds of new jobs,” Brown said. “Small, family-owned businesses are growing and will help drive our economic recovery. For firms with fewer than 20 employees, the per-employee cost of complying with the tax code is already $1,304. But under the 1099 requirement, those costs would skyrocket. Repealing 1099 will ease the paperwork burden allowing Ohio’s small businesses to focus on expanding operations and hiring workers.”
If the Small Business Paperwork Mandate Elimination Act of 2011 is not passed, businesses will be required to file a form 1099 – starting in 2012 – for all third-party vendor payments over $600. While most businesses report and pay taxes on miscellaneous income in good faith, filing the form 1099 would address the failure of some businesses to do so – a tax loophole that increases the deficit by billions of dollars each year.
Sen. Brown has heard from many Ohio small business leaders who are concerned about the potential burden and compliance costs created by the 1099 reporting requirements and he is working on behalf of Ohio’s small business community to rectify this problem. This legislation will eliminate the recordkeeping requirements. Sen. Brown has urged the Internal Revenue Service (IRS) and other agencies to work with small business to develop ways to reduce their paperwork requirements. Additionally, Senator Brown has been working with the Council of Smaller Enterprises (COSE) to discuss remedies.
Sen. Brown was instrumental in passing the Small Business Jobs and Credit Act, which created a small business lending fund – without adding one dime to the deficit – to enable community banks to make loans to small businesses seeking to expand operations or hire new workers. In addition, this legislation will increase loan guarantees, raise loan limits, and eliminate fees for lending programs offered by the Small Business Administration (SBA).
The U.S. Treasury Department estimates that more than $345 billion in owed taxes go unpaid each year, adding to the federal deficit. The 1099 information reporting requirement was passed in hopes that better information would help the IRS collect more of those unpaid taxes and keep taxes lower for all taxpayers. However, with millions of small businesses filing two 1099 forms for each vendor—one to the IRS and one to the service provider—small business advocates have estimated that the number of 1099s filed each year by small businesses could easily exceed 100 million.
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Brown Joins Push to Repeal 1099 Requirements
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