Franchisee Alert: Vote Tomorrow to Revoke New 1099 Requirements

 In 2012, a new law will go into effect which will force franchisees to spend all of their time filling out paperwork.

The law - made up of just a few sentences in the 1000+ page health care bill - requires business owners to file an IRS Form 1099 for all payments of more than $600 a year paid to providers - including corporations - that provide tangible property and services. What does this mean? If your business pays ANYONE over $600 CUMULATIVELY over the span of one year, you will need to "1099" them.  

Since its passage, leaders from both sides of the aisle have expressed their concern over this new law.  Even President Obama called for the bill's repeal in  his State of the Union address earlier this year. So why hasn't it been revoked in over a year? Politics, of course!

Democrats and Republicans are fighting over how to pay for the estimated $19 billion in lost revenues that a complete repeal is expected to cause. The House's version requires taxpayers who receive federal health insurance subsidies to pay back the IRS if they are deemed ineligible; the Senate bill pays for the cost of the repeal with unused, previously appropriated federal funds as determined by the Office of Management and Budget. 

The Senate is scheduled to vote TOMORROW on the House-passed version of a bill which would fully repeal the 1099 reporting requirement. If passed without any amendments, the bill would go to the President's desk for his signature. If not, it's back to the drawing board with the 2012 implementation date looming in the distance.

Please contact your Senators TODAY and tell them to vote YES on H.R. 4 without amendments and repeal a law which neither Congress, the White House nor the American people want put into place.

These and other important issues can be found on the CFA Votes! website.

Comments

still so what

jd says: "First, if you are an accrual basis taxpayer, then what you say you earned in revenue from a client will be different than what a 1099 says. 

Same situation if you are a cashbasis taxpayer when your vendor writes you a check on December 31, but you don't receive it until January 3.  You would record it in the year that you received it, so the 1099 that you received will be wrong. "

Have you never gotten or given a 1099? Nothing new here. Oh yeah, and the 1099 that reflects a 12/31 payment is not "wrong". It's just not the same as your cash basis books due to the very obvious and common factor you cited, which is similar to your first scenario of the accrual vs. the cash basis taxpayer.  Again, so what, this already exists, it's not that hard to understand..

And no, I wouldn't be asking a vendor what their tax year is and conform my 1099 to their year.  I'm going to send out a calendar year, not a tax year, 1099 just like I send out calendar year W-2s even if my own tax year is different.

Congrats to the CFA on repealing 1099

Congratulations to the members of the Coalition of Franchisee Associations on their efforts that resulted in  the successful repeal of 1099, the IRS form from the new Health Care Law that would have mandated additional paperwork and disclosure by business owners for all payments of more than $600 a year paid to businesses.

We needed that like we needed a hole in the head.

Well done.