Obama, Congress target 1099 rule, tax patents
Don't kid yourself: There are going to be a lot of anxious moments for the profession on both the state and federal legislative fronts this year.
Every now and then, though, a ray of light breaks through the clouds.
Let's start with President Obama's State of the Union address. POTUS spent a brief portion of his Jan. 25 speech voicing support for efforts to repeal the burdensome 1099 reporting requirements.
Those requirements, found in a provision in the health care reform package, require businesses to report to the IRS every purchase of $600 or more from a vendor of goods or services, beginning with purchases made in 2012.
Obama addressed the 1099 controversy during a portion of his speech devoted to health care reform.
"Now, I've heard rumors that a few of you have some concerns about the new health care law," Obama told Congress, tongue firmly in cheek. "So let me be the first to say that anything can be improved. If you have ideas about how to improve this law by making care better or more affordable, I am eager to work with you. We can start right now by correcting a flaw in the legislation that has placed an unnecessary bookkeeping burden on small businesses."
Music to our ears, Mr. President. It brought most lawmakers to their feet, too. 1099 repeal is a pretty popular notion in Washington these days.
Obama's comments came just days after three Democratic senators urged House Speaker John Boehner to lead the effort to repeal the 1099 rule. Boehner, of course, oversees a Republican-led House that is trying to repeal Obama's health care reform law in its entirety. With Democrats in charge of both the Senate and the White House, though, that's unlikely to happen, so lawmakers want to make sure that, at a bare minimum, the 1099 rule gets trashed.
Tax-strategy patents also under fire
CPAs also are applauding efforts to end the practice of patenting tax strategies. Senators Max Baucus and Chuck Grassley have introduced legislation that would prohibit any individual or firm from taking out such patents.
The AICPA -- a long-time opponent of tax-strategy patents -- cheered loudly.
“The problems associated with tax strategy patents, which troublingly have already been granted in areas such as charitable giving, estate and gift taxes, pension plans, and deferred compensation, are multiple and complex," said AICPA President Barry Melancon. "They undermine the integrity of our tax code and will unnecessarily complicate the ability of taxpayers to comply with the code."
Sometimes, our elected officials get it right.