New 1099 Reporting Requirement Closer to Repeal

In yet another step forward in advancing a repeal of the onerous new 1099 reporting requirement, the US Senate voted overwhelmingly on February 2, 2011 to cancel the new requirement. President Obama has indicated that he would accept the change [after the House of Representatives approves it, which is likely to happen]. The vote came as part of a failed effort in Congress to repeal the entire Health Care Reform Act, even as the new law faces a constitutional challenge in the courts. The new 1099 rules scheduled to go in effect in 2012 would require reporting of all vendor payments, including those to incorporated suppliers and for purchases of products and materials. An exception for payments made by credit and debit card has been proposed. The new 1099 reporting requirement has drawn criticism from the business community due the immense cost and effort that would be required to comply.