IRS Requests

IRS Requests Public Input on

Expanded Information Reporting Requirement

Dear Chamber Members,

Below is a link regarding the Expanded Information Reporting Requirement set to go into effect in 2012 as part of the Patient Protection and Affordable Care Act. As stated in the release below, it would require businesses to report spending with contractors (redefined as per this act) on transactions over $600.00 using a 1099 form. There are exemptions to this requirement.

Click here for information on the Information Reporting Requirement and to take action.

After speaking with several business people, there is some concern over this law. Not only is it somewhat confusing and cumbersome, but it adds another burden to businesses at a time when many businesses are struggling in a weak economy.

I would encourage anyone who has an opinion on this law to take the time to visit the IRS site and leave a comment. I would also be interested in hearing your opinions myself. Please feel free to email me with your thoughts.

Thank you

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IRS Requests Public Input on Expanded Information Reporting Requirement
IR-2010-79, July 1, 2010

WASHINGTON - The Internal Revenue Service today invited public comment on how to most effectively carry out a law change that, starting in 2012, will require businesses to report a wider range of payments to contractors, vendors and others, usually on Form 1099. These comments will help the IRS issue guidance that implements this provision in a manner that minimizes burden and avoids duplicate reporting.

Under a proposed regulation, many business purchases made with credit or debit cards would be exempt from the new reporting requirement because they are already reported by banks and other payment processors. The IRS seeks comments on additional circumstances in which duplicate reporting might otherwise occur and on rules that would prevent such duplicate reporting.

The change, enacted in March but not effective until 2012, expanded existing reporting requirements to include a business's payments related to goods and other property, and payments to most corporations. With some exceptions, payments to corporations are currently exempt from this requirement.