Sunday, September 12, 2010

A Sensible Proposed Revision -- To 1099 Reporting Scheme -- In Health Reform Package

As Republicans use the new small business IRS Form 1099 reporting requirements as an increasingly-effective whipping boy -- to seek the full-repeal of the omnibus health care reform package, most Democrats (at least during this mid-term election cycle) have begun to look favorably upon a compromise tax reporting measure, one suggested by a fellow Democrat, Sen. Bill Nelson (D, Florida). His proposed health care reform law modification would exempt any business with 25 or fewer employees, and then increase the threshold spend for requiring the filing of an IRS Form 1099, as to any individual or business -- to $5,000 in a year, as opposed to the current $600.

From The New York Times reporting, this morning -- do go read it all:

. . . .Senate Democratic leaders prefer a proposal by Senator Bill Nelson, Democrat of Florida, that would reduce the scope of the reporting requirement. Under Mr. Nelson’s plan, businesses with 25 or fewer employees would be exempt from the new requirement, and the reporting threshold for larger businesses would be set at $5,000, rather than $600.

Mr. Nelson says more than 90 percent of companies would qualify for the small-business exemption under his proposal. . . .

While I do think the goal of using required IRS reporting, to effectively force more honest tax payments from businesses is laudable, I think the sentiment expressed by some in Congress, and echoed by some IRS employees, anonymously -- that the IRS would at present struggle to even be able to interpret, or use, this ferocious "firehose-flow" of new data -- suggests a moderated course is wise. It also would have the salutory effect of reducing the number of reasonable Republican arguments to a background din -- a din that likely won't generate wide enough support to acheive a full-repeal of the health care reform package.

Ah, "Politics: the art of the possible. . . ."

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