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Simpson Signs Discharge Petition for H.R. 5141

Legislation would repeal 1099 Requirements for Small Business under Democrat Health Plan

Washington, September 16, 2010
“This requirement must be repealed,” said Simpson. “During these difficult economic times, we should not be creating new unnecessary, expensive and burdensome regulations on small businesses that they cannot afford. We should repeal this provision and instead focus on promoting measures that would encourage small businesses to grow and create jobs.”

Idaho Congressman Mike Simpson joined over 70 of his republican colleagues in signing a discharge petition for H.R. 5141, the Small Business Paperwork Mandate Elimination Act. Representative Daniel Lungren (R-CA) introduced H.R. 5141 on April 26, 2010.  This legislation would repeal the expansion of information reporting requirements for payments of $600 or more to corporations included as part of HR 3590, the Patient Protection and Affordable Care Act. 

“This requirement must be repealed,” said Simpson. “During these difficult economic times, we should not be creating new unnecessary, expensive and burdensome regulations on small businesses that they cannot afford. We should repeal this provision and instead focus on promoting measures that would encourage small businesses to grow and create jobs.”

The Internal Revenue Service’s own National Taxpayer Advocate highlighted several problems with this requirement in a recent report:

  • “[T]he new reporting burden, particularly as it falls on small businesses, may turn out to be disproportionate as compared with any resulting improvement in tax compliance."
  • "[S]mall businesses may have to acquire new software or pay for additional accounting services, incurring additional costs.”
  • “In our view, it is highly likely that the IRS will improperly assess penalties that it must abate later, after great expenditure of taxpayer and IRS time and effort.”
  • “[S]mall businesses that lack the capacity to track customer purchases may lose customers, leaving the economy

with more large national vendors and less local competition.”

The National Federation of Independent Business says this provision will have a “direct negative impact on small businesses.”  In a statement, the increased costs and burdens resulting from this 1099 provision, which was created without any input or discussion from the small business community. 

When a majority of Members of Congress sign the Discharge Petition for H.R. 5141, it will force House Leadership to bring the bill to the floor for a vote.

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