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Are lawmakers poised to repeal 1099 reporting rule?

Capitol Has reason prevailed on Capitol Hill, or are certain folks merely reading the political writing on the wall?

Given that it's Washington we're talking about, I'm not putting my money on reason.

Regardless, there's some good news surfacing in D.C. lately about those onerous 1099 reporting requirements.

Remember them? As part of the health care reform package, they require businesses to report to the IRS any purchase -- that's any purchase -- of $600 or more from a vendor of goods or services, beginning with purchases made in 2012.

Apparently, the government wants businesses to stop doing business altogether and focus solely on filing tax forms.

For most of the past year, CPAs and business folks have been appealing to politicians' sanity and pleading with them to repeal the rule, to no avail.

Now -- surprise, surprise! -- less than two weeks after the mid-term elections, Democrats are joining Republicans in lining up to condemn the requirement and play nice with businesses.

First came President Obama. A day after the mid-terms, Obama said he would support efforts to repeal the 1099 rule.

Next, outgoing House Speaker Nancy Pelosi told NPR that repealing the rule would be a good starting point as the parties look for opportunities to compromise on health care reform. "One item that I think we all agree on ... is 1099, which affects small businesses and small contractors and how they report their transactions," Pelosi told NPR's Steve Inskeep. "They know what it means, and they know they'd like to see it go. I think that's probably the first place we could go in together."

Now comes Senate Finance Committee Chairman Max Baucus, who has said he will introduce legislation to repeal the rule. "I have heard small businesses loud and clear and I am responding to their concerns," Baucus said. "Small businesses are the backbone of our economy in my home state of Montana and across the country, and they need to focus their efforts on creating good-paying jobs -- not filing paperwork."

Look, I don't care why they're doing it. Let's just fix this mistake and move on from there.


Bill Sheridan