The American Institute of CPAs has called on Congress to repeal a requirement that businesses making purchases of more than $600 in goods or services from another vendor would have to provide the vendor and the Internal Revenue Service with a Form 1099-Misc. The AICPA termed the requirement "burdensome."
The first 1099 forms would be due in 2013 under the Patient Protection and Affordable Care Act, which means that businesses would need to keep records starting in 2012. Similar reporting requirements in the Small Business Jobs Act of 2010 would require owners of rental property to file 1099s for expenses. Those would first be due in 2011.
In a prepared statement, the AICPA said "businesses do not need the added cost of more regulatory requirements at a time when their efforts must be focused on profitability and sustainability" and continued that "increased profitability is likely to yield more tax revenues than the expansions to the reporting requirement."
The AICPA said this would be first time individual taxpayers who own rental property who are not "engaged in a trade of business" would have to provide Forms 1099-MISC. For example, owners of vacation properties that are rented part of the year to help reduce costs would be covered by the new law.
The association also argued that the need to keep records, obtain tax identification numbers and provide 1099-MISC forms "during January, a month when taxpayers would not normally be focused on tax issues, would be extremely burdensome ..." Additionally, the AICPA said it questions the need for sending information forms to certain providers of services, such as utility companies.
Bob Scott has provided information to the tax and accounting community since 1991, first as technology editor of Accounting Today, and from 1997 through 2009 as editor of its sister publication, Accounting Technology. He is known throughout the industry for his depth of knowledge and for his high journalistic standards. Scott has made frequent appearances as a speaker, moderator and panelist and events serving tax and accounting professionals. He has a strong background in computer journalism as an editor with two former trade publications, Computer+Software News and MIS Week and spent several years with weekly and daily newspapers in Morris County New Jersey prior to that. A graduate of Indiana University with a degree in journalism, Bob is a native of Madison, Ind