Text of Senator Baucus’s Proposed Repeal of New Form 1099 Rules

The text of Senator Baucus’s proposed repeal of the new Form 1099 rules is short and sweet:

S. 3946

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ‘‘Small Business Paperwork Relief Act’’.

SEC. 2. REPEAL OF EXPANSION OF INFORMATION REPORTING REQUIREMENTS.

Section 9006 of the Patient Protection and Affordable Care Act, and the amendments made thereby, are hereby repealed; and the Internal Revenue Code of 1986 shall be applied as if such section, and amendments, had never been enacted.

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Senator Baucus made the following statements on the floor of the Senate in introducing this bill:

By Mr. BAUCUS (for himself Mr. BEGICH, Ms. LANDRIEU, Ms. STABENOW, Mrs. SHAHEEN, and Mr. BROWN of Massachusetts):

S. 3946. bill to repeal the expansion of information reporting requirements for payments of $600 or more to corporations, and for other purposes; to the Committee on Finance.

Mr. BAUCUS. Mr. President, today, I am introducing a bill to help small businesses across America. The Small Business Paperwork Relief Act repeals recently enacted information reporting rules.

Known as ‘‘the 1099 provision,’’ these rules would have required businesses to file Form 1099 with the IRS to report payments made to corporations for goods and certain services with the hope that that better information would help the IRS collect more of the taxes that are legally owed, and in turn, keep taxes lower for all taxpayers.

Forms 1099 have been used by the IRS for decades to better track income.  And in fact, this type of information reporting was proposed by the Bush administration to help better keep track of what businesses spend and earn, which helps better keep track of what they owe in taxes.

But it has become clear the new rules went too far.

As I traveled my home state of Montana, I listened to small business owners like Darrell Keck, owner of the Dixie Inn in Shelby.  Darrell and his wife Jeanne run a tight ship, they are hard-working, and they pay their taxes.  This is just one of many mom-and-pop businesses in Montana and throughout the country that told me they do not have the manpower or the software to make the new Form 1099 reporting rules work.

I have listened to small businesses, I have heard small businesses, and I am responding to small businesses by offering this bill for full repeal of the new information reporting requirements.

The time and expense for small businesses to comply with the new rules far exceed any benefit. Especially in these tough economic times, now is not the time to put additional stress on small businesses to meet complicated government rules. Small business is the backbone of the American economy—especially in Montana where more workers are employed by small businesses than anywhere else in the country. Business owners need to focus their efforts on growing their business and creating jobs—not filing paperwork.

As Chairman of the Senate Committee on Finance, I remain committed to improving tax administration and enhancing voluntary tax compliance.  When each person pays what he owes, our nation’s system of voluntary tax compliance is fairer for everyone—without raising taxes on anyone.  I look forward to working collaboratively with the small business community to improve the ability of small businesses to understand and meet their tax obligations.

Small businesses in Montana and all across America want to comply with the tax laws. But these new rules stretched their ability to do that. I urge my Colleagues to support their full repeal.

Mr. President, I ask consent that the text of the bill be printed in the RECORD.

There being no objection, the text of the bill was ordered to be printed in the RECORD, as follows:

S. 3946

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ‘‘Small Business Paperwork Relief Act’’.

SEC. 2. REPEAL OF EXPANSION OF INFORMATION REPORTING REQUIREMENTS.

Section 9006 of the Patient Protection and Affordable Care Act, and the amendments made thereby, are hereby repealed; and the Internal Revenue Code of 1986 shall be applied as if such section, and amendments, had never been enacted.

You can find this in the Congressional record here.

About Joe Wallin

Joe Wallin focuses on emerging, high growth, and startup companies. Joe frequently represents companies in angel and venture financings, mergers and acquisitions, and other significant business transactions. Joe also represents investors in U.S. businesses, and provides general counsel services for companies from startup to post-public.
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