UPDATE: New 1099 Reporting Requirements Repealed!

Recently passed legislation requiring a massive overhaul in the 1099 reporting system has met with passionate opposition from small business owners, the accounting community and even the IRS Taxpayer Advocate. In response, two efforts are underway in Washington to reduce the requirement or repeal it outright.

The least likely effort was put forward by Senator Mike Johanns of Nebraska, proposing an outright repeal of the new reporting rules. Unfortunately, the Democratic support is unlikely because the proposal would also repeal a preventative medical care fund for the uninsured.

By mid-September, debate should begin on a Democratic proposal put forward by Senator Bill Nelson of Florida. This version would add several exemptions to the new reporting requirements, including an outright exemption for businesses with fewer than 25 employees. Furthermore, the Treasury Department would be authorized to exempt payments for common purchases such as airline tickets and office supplies.

Everyone keep your fingers crossed that the two parties can come together to save our nation’s small business owners from this crazy new reporting requirement!!