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President Repeals Additional 1099-MISC Reporting
April 27, 2011
I want to start by clarifying some misinformation which has been circulating amongst those who make their living on sites like Ebay. The repeal recently signed into law by President Obama does not effect, in any way, the reporting requirements mandated upon Paypal and other payment processing sites that began this year. For lack of a better term, the “Paypal” law deals with information reported on a 1099-K. The President’s repeal deals only with certain information reported on a 1099-MISC, which is an entirely different form. As a means to pay for the leviathan-size cost of the healthcare act signed into law last year, a provision was written into the act which would have required companies to report more of their transactions to the IRS. This provision was estimated to bring in roughly $22 billion in additional revenue each year. Small businesses, however, argued that the act created an unjust burden and they would now have to significantly increase their tax information filings. Such burden, they argued, vastly outweighed the benefits. And Congress agreed. On April 14, 2011, President Obama repealed the additional tax filing mandate. Since the mandate had not yet taken effect, the actual impact is zero-sum for small businesses. Small businesses will simply continue to file in the same manner they had been before the healthcare act was passed. For more information, please read here.