House Republicans To Take Up Repeal Of ObamaCare 1099 Reporting Rules

There appears to be bipartisan support for repealing one of the most egregious tax rules in last year's Affordable Care Act

Among the most criticized provisions of the Affordable Care Act are the new 1099 reporting requirements, which greatly expand the circumstances under which businesses are required to report transactions to the Internal Revenue Service. By some estimates, the new rules will costs businesses $ 6,000 per year, or more, in additional administrative expenses. A small amount for large businesses, but a potential game changer for small businesses. Both Republicans and Democrats have criticized the rules and tried, unsuccessfully, to repeal them during the last Congress. Now, House Republicans are trying again:

Republicans signaled Wednesday that repealing a controversial tax provision in the healthcare law is one of their most pressing priorities.

House Republicans have renumbered the bill repealing the tax requirement as H.R. 4, signaling it will be one of their first pieces of business.

The bill would repeal language requiring companies, starting in 2012, to report all goods and services transactions valued at more than $600 to the IRS. Republicans and Democrats, and even the White House, have since said they support repealing this language, which would raise $19 billion over 10 years and was included to help pay for the healthcare law.

Rep. Dan Lungren (R-Calif.) had already introduced a so-called 1099 repeal bill, which was numbered H.R. 144. By bumping up that bill to H.R. 4, Republicans are making it clear that they will move this bill on an expedited basis. Traditionally, the House majority controls the first 10 bills in Congress (H.R. 1 through H.R. 10), and usually reserves those numbers for high-priority items.

House aides said they expect H.R. 4 to be taken up shortly after the House votes on H.R. 2, which would repeal the healthcare law. Republicans want to show they support repeal of the law in its entirety, although most recognize that repeal has no chance of moving in the Senate or being signed by the White House. After the repeal vote, Republicans are expected to begin taking on the law in piecemeal fashion, and H.R. 4 will be a part of that process.

In the meantime, H.R. 4 has 245 co-sponsors, more than the 194 co-sponsors of H.R. 144, a sign that support for 1099 repeal is strong and growing. Twelve Democrats are co-sponsors of the bill, including House Financial Services Ranking Member Barney Frank (D-Mass.).

(…)

Sens. Mike Johanns (R-Neb.) and Joe Manchin (D-W.Va.) have said they would introduce 1099 repeal legislation on Jan. 25, the first available day for offering new bills in the Senate.

Passage in the House seems assured given the huge number of co-sponsors, but the fate in the Senate is less clear. Perhaps, with such broad bipartisan support we’ll see this breeze through the Senate but I could easily see it getting it hung up there by Senators insisting that taxes have to be raised somewhere else to make up the $5 billion over ten years that this requirements was expected to bring in to the Treasury. And then there’s President Obama. Would he veto a repeal of the 1099 requirement, or go along with what looks like it could become an overwhelming bipartisan consensus?

Only time will tell, but as I said earlier this month, it strikes me that this piecemeal approach is the best option the GOP has in going after the ACA since all out repeal is unrealistic as long as Barack Obama is in the White House and the Democrats control the Senate.

FILED UNDER: Economics and Business, Health Care, Taxes, US Politics
Doug Mataconis
About Doug Mataconis
Doug holds a B.A. in Political Science from Rutgers University and J.D. from George Mason University School of Law. He joined the staff of OTB in May 2010. Before joining OTB, he wrote at Below The BeltwayThe Liberty Papers, and United Liberty Follow Doug on Twitter | Facebook

Comments

  1. sam says:

    Uh, I don’t think this is accurate:

    “Both Republicans and Democrats have criticized the rules and tried, unsuccessfully, to repeal them during the last Congress. ”

    Both criticized, it is true, but the House Republicans stymied the effort in the House last term, see Republicans say nix to Democrats’ health law fix

    “And then there’s President Obama. Would he veto a repeal of the 1099 requirement, or go along with what looks like it could become an overwhelming bipartisan consensus?”

    Of course, he’ll go along with the consensus.

  2. sam says:

    Oh, and

    ” I said earlier this month, it strikes me that this piecemeal approach is the best option the GOP has in going after the ACA”

    That would be interesting to watch. Will they go after repealing the donut-hole relief provision; the pre-existing condition provision; the no-cap provision; the no recission provision; the child insurance provision; the adult child provision? In short, will they go after the provisions that have wide-spread appeal? I don’t think so. What provisions do you think they will go after?

  3. Jack says:

    The $600 lower bound in this provision has never made sense to me. Perhaps I didn’t follow the development of the final, passed bill closely enough, but it seems if they wanted to exclude burdensome requirements from falling on small businesses, they could have both increased the lower bound and included language saying it only applied to businesses over a certain size, both limits indexed to GDP or inflation in some manner.

  4. Franklin says:

    Personally, this is kind of what I wanted. A health care bill was finally passed, acknowledging there’s a problem with our health care delivery. Now we can make improvements to the obviously imperfect bill.

  5. Jay Tea says:

    Nancy Pelosi said that they’d have to pass the bill so we could then see what’s in it. Well, we’re seeing it just fine.

    If only folks had told the Democrats who rammed through this bill to actually read it before voting…

    J.

  6. Dave says:

    Actually, the 1099 requirement is almost a killer for small businesses the way it currently stands.

    For my small business, I would have to issue about 85-97 1099s. Its not just for one time transactions, but cumulative transtions that equal more th $600 per year. So, I may need to get the Post Office to give me a W-9 so I can issue them a 1099 for the $$$$ in stamps I buy in the course of a year.

    Its not exactly clear, but presumedly I would have to issue the IRS a Form 1099-Misc. since I would be making a payment in excess of $600 for “service”.

    Also, once I get all these Federal Tax ID from all these vendor, can I resell them? Why not? What if someone breaks into my store and steals my W-9 records?

    If anything, the requirement will cause me to closely examine who are my suppliers and determine if its really worth the pain of doing business with them.

    What about all the stuff I buy on eBay and use PayPal? Not sure how that will work for W-9s.

    Failure on my part to issue a Form 1099 is reason for the IRS to disallow the expense among other things. The penalty for failure to file or filing with incomplete or inaccurate information is $50 per form up to a maximum of $250,000. The penalty for intentional disregard of the filing requirements is $100 per form with no maximum.

    Who wants to take the chance of not issuing a 1099. You don’t give me a W-9 up front, I will no longer do business with you.

  7. sam says:

    “If only folks had told the Democrats who rammed through this bill to actually read it before voting…”

    So, Jay, what provisions do you they should repeal?

  8. Not Jay, but I’ll happily say all of them.

  9. wr says:

    So Charles — You want to make it impossible for someone who has had cancer or a heart condition ever to get insurance again? You think you’ve got a candidate who can make that sound good?

  10. If you can get a legislator to propose that without an additional 2,000 pages of legislation requiring 54 new federal committees, all the new taxes, the destrcutiuon of private insuarance, etc…, I’ll consider it.

    But more fundamentally, I think you need to understand what insurance is and what it is not. If you can start a business that will “insure” everyone at what you consider a “fair” cost without regard to preexisting conditions and the government telling you what you must and must not take into consideration when preparing your actuarial tables and still make a profit, nay, just stay in business, have at it. I’m sure you’ll have no shortage of customers if your price is right. On the other hand, if you want to wave a magic wand and pretend that everything is free, or should I say to each according to his need, from each according to his abilities, well, let’s just say I’m not signing up to that.

    Nobody said life is fair, or that you have the right to take from John because Peter needs it and, of course, doing so will make you feel better.

  11. steve says:

    As Sam noted, they tried to change this before, but Republicans stopped it. Now they are for it. Who would have guessed?

    Steve

  12. anjin-san says:

    > On the other hand, if you want to wave a magic wand and pretend that everything is free, or should I say to each according to his need, from each according to his abilities, well, let’s just say I’m not signing up to that.

    Tell me Charles, do you have between 500K and a million dollars in liquid assets? Because if you don’t, and a member of your family suffers, God forbid, a catastrophic illness or accident, you have a real problem. Christopher Reeves’ assets were not enough to pay for his care, and he was a movie star.

    If someone you love, a wife, a child needs care beyond your insurance, beyond your means, are you going to take a hard line based on your principles and refuse the help from the government that you will almost certainly need?

    Of course not. But in the mean time, you will condemn others who do. You should consider a little soul searching on this issue…

  13. anjin-san says:

    On the subject of changing the 1099 requirements, it seems like a good idea. Worth noting that Democrats were willing to do it previously, but the GOP blocked them to gain a political advantage.

  14. wr says:

    So Charles — If your wife or child is diagnosed with cancer and your insurance is cancelled because the Republicans have repeales ACA, will you simply sigh and say “Oh, well, life isn’t fair.”?

  15. anjin-san says:

    Charles?