Insurance group calls for repeal of 1099 rule

“[This] onerous provision will cost jobs,” the letter states. “The amount of resources that will have to be poured into new recordkeeping, accounting and compliance procedures will be especially burdensome for small businesses such as those in our membership. At a time when we are attempting to recover from a deep recession, this provision will stretch already thin resources to the breaking point.”

Repealing, or modifying, the requirement was gaining traction in Congress before lawmakers adjourned for the August break.

Sen. Mike Johanns (R-Neb.) sought to repeal the mandate in small-business legislation that established a $30 billion lending pool and provided $12 billion in tax breaks for these organizations.

Senate Democrats also tried to modify the provision by exempting companies with fewer than 25 employees from complying with the rule and raising the reporting threshold to purchases over $5,000 for larger businesses that would still have to submit the forms to the IRS.

In the House, Republicans attempted to repeal the rule in legislation aimed at bolstering the manufacturing sector.

None of these initiatives managed to pass their respective chamber, but they will likely be revisited when Congress returns in September.