Friday, April 30, 2010

New 1099 Requirements

It seems as though the US Chamber is stepping into this discussion. See below.

Thank you to everyone that said they would send a letter of support for HR 5141. I will have a letter to you by Monday.

I talked to Congressman Lungrens office yesterday and they said what will be important in any letters sent will be the affect on your business. For example my company does 25 1099s. The new requirements will force me to do 700. Give some thought as to how it will impact you.

Thank you also to all the association that agreed to sign a joint letter. I will get the letter to you Monday.

If any other associations on this email want to sign on please let me know. I will be sending to every House member in California.

Scott Hauge
Small Business California
2311 Taraval Street
San Francisco, CA 94116

Letter supporting H.R. 5141, the "Small Business Paperwork Mandate Elimination Act"

April 29, 2010

The Honorable Dan Lungren
U.S. House of Representatives
Washington, DC 20515

Dear Representative Lungren:

The U.S. Chamber of Commerce, the world’s largest business federation representing the interests of more than three million businesses and organizations of every size, sector, and region, strongly supports H.R. 5141, the “Small Business Paperwork Mandate Elimination Act,” which if passed into law, would repeal the onerous paperwork burdens imposed on business by the ill-conceived expanded information reporting mandate contained in Section 9006 of the “Patient Protection and Affordable Care Act” (PPACA). This provision was used as an unrelated “pay for” in the PPACA and it should be rescinded based on the merits of the provision alone.

Unless this section is repealed, businesses across the nation will be subjected to the folly of data collection and information filing on virtually all business-to-business transactions they make aggregating $600 or more in a year at a time in which many can least afford it. When the United States is depending on the small business community to generate jobs and grow the economy, lawmakers are diverting their precious time and resources to collecting volumes of information and filling out mounds of new paperwork for the government.

If allowed to be implemented, Section 9006 of the PPACA will also have a chilling effect on new business relationships, most of which will be small businesses and startups. Many businesses in an attempt to reduce data collection and paperwork burdens will simply reduce vendors and refuse to entertain new business dealings. This will have a disproportional impact on small businesses and entrepreneurs attempting to get a foot in the door.

The ultimate irony of these new burdens is that the IRS neither has the resources nor the ability to use the new information to reconstruct an accurate picture of a company’s revenues since a large volume of business-to-consumer transactions are not reported. While the vast majority of compliant taxpayers will bear the cost of implementing this law, it will have only minimal benefit as a government tool in reducing non-compliance.

Moreover, the U.S. tax system is only as strong as the willingness of its participants to voluntarily comply. Imposing vast new data collection and reporting requirements may be viewed by many small business owners as unreasonable and overreaching. In the end, this could serve to undermine confidence in the government and further frustrate tax collection efforts.

Ninety-six percent of the Chamber’s members are small businesses with fewer than one
hundred employees. On behalf of its members, the Chamber thanks you for introducing this important bill and looks forward to working with you on its passage.

R. Bruce Josten

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