Costly mandate in health care bill will be a business nightmare
Form 1099 required for all vendors who are paid more than $600
Buried in the 2,000+ pages of the health care bill is a curious mandate for businesses: File a form 1099 for every entity you do business with in excess of $600. Chris Hesse, our Director of Taxation, believes this will amount to billions of pages of compliance paperwork funneled to the IRS.
Chris Edwards of the Cato Institute sums it up in his blog:
"Basically, businesses will have to issue 1099s whenever they do more than $600 of business with another entity in a year. For the $14 trillion U.S. economy, that’s a hell of a lot of 1099s. When a business buys a $1,000 used car, it will have to gather information on the seller and mail 1099s to the seller and the IRS. When a small shop owner pays her rent, she will have to send a 1099 to the landlord and IRS. Recipients of the vast flood of these forms will have to match them with existing accounting records. There will be huge numbers of errors and mismatches, which will probably generate many costly battles with the IRS."
Mr. Edwards also quotes Mr. Hesse in his blog. Read it all here.