New draconian IRS 1099 requirement likely to be relaxed
Senate Finance Committee Chairman Max Baucus (D-MT.) announced this week he would introduce legislation to repeal the IRS requirements to file a 1099 form for payments of $600 or more for goods and certain services. The current requirement was part of Finance Reform legislation written to give the IRS more tools to ensure all owed taxes were paid. However, following passage of the law, NADA and other business owner associations expressed concern that the provision placed too large a paperwork burden on businesses and led to significant confusion and the possible false tax liabilities. In response, Sen. Baucus said this week that he would act to get repeal of the new reporting requirements in motion and to look for other ways to improve tax compliance.
The move significantly increases the chances that the repeal provision will be in tax legislation the lame duck Congress is expected to take up between now and the end of the year. And, if not resolved in the lame duck session, repeal surely will be one of the first orders of business in the upcoming 112th Congress.
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