U.S. Chamber urges repeal of 1099 mandate

“If this provision is implemented, the 1099 reporting mandate will impose substantial paperwork and reporting burdens on the backs of governments, nonprofits and businesses — especially small businesses,” the letter states, adding that the requirement will create a whole new layer of compliance that will be costly to these organizations.

The Chamber also argues it could drive traffic away from some companies as businesses streamline their vendor lists to reduce compliance efforts.

“[The] new 1099 reporting mandate will alter behavior in the marketplace,” the letter states. “In order to minimize reporting, government, nonprofits and businesses may consolidate their purchases with several large vendors with broad geographic presences and a more diverse product line instead of a number of smaller ones.”

The Chamber’s letter echoes some of the concerns by the National Taxpayer Advocate, which said the mandate could be problematic for businesses and the IRS.

Senators on both sides of the aisle are looking to either repeal or modify the requirement in legislation providing loan opportunities and tax relief to small businesses. Votes on that bill are expected in September.