As part of Health Care Reform, there is a controversial provision related to 1099 reporting that will significantly impact businesses of all sizes.
Basically, for payments made after Dec. 31, 2011: (1) businesses that pay any amount greater than $600 during the year to non-tax-exempt corporate providers of property and services will have to file an information report with each provider and with IRS; and (2) businesses will have to file information returns with respect to any person (including corporations) that receives $600 or more from the business in exchange for property and merchandise. In essence, mandating a 1099 be filed to anyone paid over $600.
There is a lot of activity regarding repealing this provision.However, we do not believe that this provision in its entirety will be repealed. We expect some clarification next year. We’ll keep you posted as this area heats up.