IRS Accepting Comments on Implementation Rules
The Greater Omaha Chamber wants to make member businesses aware of the new filing requirements for business-to-business transactions. The health care reform legislation recently approved by Congress contains myriad provisions that are not related to health care insurance or delivery. Among these is a broad expansion of 1099-MISC filing requirements for business-to-business transactions.
Currently, businesses file 1099-MISCs when payments are made to an independent contractor for services totaling at least $600 in a calendar year.
Under section 9006 of the health care law, beginning in 2011 this filing requirement will be expanded to include the purchase of goods. In addition, payments subject to reporting will be expanded to include those made to all corporations subject to the income tax. In effect, this will result in reporting of all business-to-business transactions that aggregate to $600 per year.
Legislation has been introduced (HR 5141, the Small Business Paperwork Mandate Elimination Act) that would repeal these new requirements. It is co-sponsored by Nebraska Reps. Lee Terry, Jeff Fortenberry and Adrian Smith. The outlook for this bill is uncertain.
In the meantime, recognizing that this will result in a substantial increase in the regulatory burden on businesses (and the government), the Internal Revenue Service is taking public comment on rules to implement this requirement.
Comment is requested on:
- Implementing this in the least burdensome manner, including avoiding duplication of reporting
- Defining the terms "gross proceeds" and "amounts in consideration for property"
- Whether the reporting requirements should apply to payments between affiliated corporations
- Process and timelines for filing reports, including those for present 1099 requirements
- Suggested changes to Form W-9 (Request for Taxpayer Identification Number and Certification) and rules for requesting identification numbers, including privacy concerns
- How to administer backup withholding requirements for missing identification numbers.
Comments can be submitted until Sept. 29.
By mail:
Internal Revenue Service,
CC:PA:LPD:PR (Notice 2010-51),
Room 5203
P.O. Box 7604
Ben Franklin Station
Washington, D.C. 20044
By e-mail:
Comments@irscounsel.treas.gov
(Use "Notice 2010-51" for the subject line.)
You can view the IRS announcement on the rulemaking at http://www.irs.gov/pub/irs-drop/n-10-51.pdf.