Repeal of New 1099 Requirements Failed

The U.S. Senate on Wednesday rejected two separate amendments that would have eased the IRS Form 1099 requirements for farms and small businesses.

In a 46-52 vote, the Senate failed to invoke cloture on an amendment by Sen. Mike Johanns (Neb.) that would have repealed the new 1099 requirements. Then, in a separate vote of 56-42, the Senate also failed to invoke cloture on an amendment by Sen. Bill Nelson (Fla.) to exempt small businesses from new 1099 reporting and increase reporting thresholds for larger businesses.

The American Sheep Industry Association (ASI), along with 27 other national and state agricultural organizations, requested a repeal of the new IRS Form 1099 information return filing requirements.

Under existing law, a 1099 must be issued to unincorporated service providers that are paid more than $600 during a tax year. Under the new reporting rules set to start in 2012, 1099s will be required for payments to incorporated vendors and will be expanded to cover payments made for goods as well as services. Virtually all business-to-business transactions will be covered, creating a new major paperwork burden for the farms, ranches and related agribusinesses.

It takes 60 votes to invoke cloture.