Congress Takes Steps to Repeal 1099 Reporting Requirement

Requirement a Burden for FPs, Says Academy

February 08, 2011 03:15 pm News Staff

Congress is moving to repeal a provision in the health care reform law that caused considerable consternation among family physicians because it would lead to more paperwork and a significant economic burden, according to AAFP President Roland Goertz, M.D., M.B.A., of Waco, Texas.


The Patient Protection and Affordable Care Act requires that, beginning in January 2012, all businesses must issue a 1099 tax form to any individual or corporation from which they buy more that $600 in goods or services in an individual tax year. Currently, 1099 forms are issued only to individuals and not corporations.

Many AAFP members run small and medium-sized practices, making the reporting requirement an "economic hardship" for them, said Goertz. The measure would force many AAFP members to "absorb the extra cost of generating and filing all of these 1099 forms with the Internal Revenue Service when they purchase goods or services worth more than $600 a year," he noted.

Repeal of the measure would eliminate a lot of paperwork and the costs associated with generating reports, Goertz said. That is why the AAFP was pleased when the Senate passed an amendment to repeal the 1099 provision on Feb. 2. The House also is expected to approve the amendment.

During his State of the Union address on Jan. 25, President Obama called for "correcting a flaw in the (health care reform) legislation that has placed an unnecessary bookkeeping burden on small businesses" -- an obvious reference to the 1099 reporting requirement.