Republicans Block Effort To Repeal 1099 Tax Reporting Rules

After spending much of the past eight months or so criticizing the new 1099 reporting requirements contained in the Affordable Care Act, and even trying to repeal them back in July, Republicans are now blocking a Democratic effort to repeal the rules in the lame duck session:

Another day, another failed attempt at 1099 repeal.

Republicans rebuffed a Democratic effort to repeal health reform’s universally panned 1099 IRS reporting requirements as a piggyback in the tax cut deal, congressional aides on both sides of the aisle confirm to POLITICO.

The move leaves 1099 rollback in play for the next Congress, giving Republicans an easy target in an otherwise challenged landscape for health reform repeal. Democratic aides allege Republicans are stalling on repealing the unpopular measure for political benefit.

Health reform’s 1099 tax reporting provision requires businesses to file IRS paperwork on any vendor purchases over $600. Both parties have failed in multiple attempts to dial back the unpopular provision.

Democrats thought they saw a path forward with the tax-cut legislation: attach 1099 repeal to the larger, Republican-supported bill and settle the matter once and for all.

But Republicans, who took a hard line against any “Christmas tree” add-ons, nixed the idea.

“For all their talk about small businesses, it was stunning to see Republicans walk away from them when they had a chance to actually help,” a Democratic Congressional aide tells POLITICO. “Rather than working to include 1099 repeal in the bill, they actively refused in order to continue their political posturing. We all agree small businesses had some real concerns, that we should listen to them and repeal this provision … Small business owners deserve more than lip service from Republicans.”

A Republican Congressional aide familiar with the discussion says the 1099 repeal provision was rejected as one of many Democrat-offered add-ons. Republicans tried to craft a final product that hewed closely to the legislation’s first draft, the source said.

The 1099 reporting requirements have been among the most universally panned provisions of the health care reform law, with some sources estimating that it could cost the average small business as much as $ 6,000 per year in additional administrative expenses. Both parties have thus been under pressure from small-business lobbyists to repeal the provision, and it seems fairly clear at this point that the votes to repeal are there in both the House and the Senate.

So, why are the Republicans blocking it? Well, let’s just say that it has little to do with a sudden GOP concern for Congressional bills with lots of add-on provisions, and everything to do with politics. If the 1099 provision gets passed now, the GOP will be unable to claim credit for it. If they wait until January and make it one of the first legislative actions of the 112th Congress, they’ll be able to say “see, we did this,” and it will help their efforts to continue painting Democrats as anti-small business. It’s cynical, it’s stupid, and it’s politics as usual. Don’t tell me you’re shocked.

FILED UNDER: Congress, Economics and Business, Taxes, US Politics, ,
Doug Mataconis
About Doug Mataconis
Doug Mataconis held 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 and contributed a staggering 16,483 posts before his retirement in January 2020. He passed far too young in July 2021.


  1. tom p says:

    “Don’t tell me you’re shocked.”

    no fair Doug. You took away my line….

  2. Patrick T. McGuire says:

    I’m shocked, SHOCKED, that there is politics going on in Washington!!!

  3. Boyd says:

    I think it’s disingenuous to base the article (and your subsequent post, Doug) almost entirely on Democratic input. We’re offered an extensive quote from a Democratic aide, and nothing comparable from the Republicans. Why wasn’t this Republican aide quoted? I’m sure there’s more rationale than merely “we want to keep a clean bill.”

    Of course, when that’s the story one wants to tell, skewing the reporting is the easiest way to do it.

  4. John Personna says:

    But don’t we now get to say “but you were against repeal before you were for it”?

  5. Herb says:

    “Why wasn’t this Republican aide quoted?”

    What, you expect them to come out and admit that they’re being cynical, stupid, run of the mill politicians? Here’s what the Republican aide will say: “add-in provisions.”

    I will admit that I’m not surprised. But then again, I saw this coming and voted mostly for Democrats this time around.

  6. Mithras says:

    The unfortunate thing is that, while the 1099 provision is a draconian way of going about it, the goal it was aimed at is worthwhile. While the U.S. tax system overall has a very high rate of compliance, the biggest area of the ‘tax gap” – underreporting of taxable income or overreporting of deductions – is in small business.

    A former assistant IRS commissioner said recently that given the deficit and the inability to raise rates, enforcement is the only thing the government can do to increase revenues. With or without the 1099 provision, what’s coming are an army of auditors. The 1099 provision just would have made their jobs easier.

  7. james says:

    Exhausted is the correct Statement

    Tax Code is reason for most Poverty, Gateway to your Wallet
    (They are now into the futher’s game, no one know’s the rules.
    This ship is now a Submarine.)

    Don’t think so look at the National Debt.

    It’s how the Ruling class perpetuate their power.
    (16000 New IRS Agents)

    I’m thinking sales tax, eliminate all subities, entitlements Department of Education, Energy,

    EPA, IRS these Kingdom’s need to be abolished !

    Ruling Class has special interest “Health Care, Retirement Fund, Sweetheart Deal’s”

  8. sookie says:

    >> It’s cynical, it’s stupid, and it’s politics as usual. Don’t tell me you’re shocked. <<

    As long as it's repealed I don't care who gets credit and the Dems certainly should take their knocks for it to begin with, which was beyond stupid..

  9. wr says:

    So James — As long as you want to eliminate the EPA, would you mind if I opened a toxic waste processing plant next door to your house?

  10. james says:

    Seems a little exstream, quid pro quo can I Drive my bull dozer…….

    It’s not a Atomic event, We have no toxic waste it all went over Seas remember,
    with the jobs.

  11. Scott says:

    The author of this rag seems to forget one thing. The democrats passed this poison pill into existance in a bill they did not read. Who is playing politics here bubba?