President Signs into Law Repeal of PPACA’s 1099 Filing Requirement

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In a rare bipartisan moment, President Obama signed into law on Thursday [GC1] the repeal of the new 1099 filing requirement, which was initially mandated as part of the Patient Protection and Affordable Care Act (PPACA). [1]One of the more controversial provisions of PPACA, Section 906 created a new obligation for corporations to file a 1099 on each business transaction of $600 or more and to provide the payee with a copy. [2] This statutory obligation was more fully developed in §6041 of the Internal Revenue Code.Congressional leaders from both parties agreed that the added 1099 filing requirement would be an administrative hassle and should not be implemented. Even President Obama stated that the requirement would “place an unnecessary bookkeeping burden on small businesses.”[3] As a result, both the Republicans and Democrats worked together in both houses of Congress and recently passed a bill to repeal the additional 1099 filing requirement, which the President signed a week later.The provision, H.R. 4, Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act of 2011, was introduced by Rep. Daniel Lungren (R-CA) in the House.  H.R. 4 quickly gathered over 270 co-sponsors. The legislation passed with a vote of 314 to 112.[4] The legislation then moved over to the U.S. Senate and was up for debate over the past month. The legislative agenda was tight, but with bi-partisan support the legislation came up for a vote on April 5. The measure passed 87 to 12 and was sent to the President for his signature on April 6. With the President’s sign-off on April 14, the repeal will take effect next month.  The passage of H.R. 4 is significant.  It constitutes the first time the Democrats have agreed to amend PPACA. There are other aspects of PPACA that will be addressed in this session of Congress. Since the Republicans were unable to convince enough Democrats in the Senate to support PPACA repeal, Republicans will attempt to chip away at the Act. Additional amendments will be proposed, including the repeal of the $105 billion in ongoing funding that was salted away in PPACA. The bipartisan support for H.R. 4 will encourage those seeking further changes. How successful their attempts will be remains to be seen.Stay tuned to this website for further developments. [1] See http://www.gpo.gov/fdsys/pkg/PLAW-111publ148/html/PLAW-111publ148.htm[2] BenefitMall provided an overview of this requirement late last year, see https://www.benefitmall.com/PORTAL/Portals/0/Legislative%20Alert/20101029LegislativeAlert.pdf[3] See press release http://www.whitehouse.gov/briefing-room/press-briefings [4] See U.S House of Representatives record http://clerk.house.gov/evs/2011/ROLL_100.asp  [GC1]If goes out today, insert “yesterday”

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