[Congressional Record Volume 153, Number 29 (Thursday, February 15, 2007)]
[Senate]
[Pages S2085-S2086]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. SCHUMER:
  S. 636. A bill to amend the Internal Revenue Code of 1986 to extend 
the reporting period for certain statements

[[Page S2086]]

sent to taxpayers; to the Committee on Finance.
  Mr. SCHUMER. Mr. President, I rise today to introduce the ``Reduce 
Wasteful Tax Forms Act of 2007.'' This bill extends the deadline from 
January 31 to February 15 for certain types of 1099 forms to be sent to 
taxpayers. 1099 forms are used to report non-wage income, such as 
income from dividends and capital gains. These forms are distributed by 
brokerage firms and financial institutions to their investors, who must 
report the information on their income tax returns.
  Due to recent changes in tax laws that govern income from interest 
and dividends, there has been a significant increase in the number of 
inaccurate forms sent out by firms in order to meet the January 31 
deadline. The problem is that much of the tax data for certain types of 
investment income cannot be calculated until after the first of the 
year, resulting in a compressed window for calculating data in 
compliance with the new laws and mailing the forms. Once accurate data 
becomes available, financial institutions must send taxpayers an 
amended form with the correct information.
  These amended forms create confusion for taxpayers, and in some 
cases, those who receive an amended 1099 may have to re-file their 
taxes. If taxpayers underpaid in their initial return, they could face 
interest charges and penalties if they do not file again before the 
April 15 deadline. The January 31 deadline results in tons of wasted 
paper, confusion for taxpayers, and wasted expenses incurred in sending 
the amended forms.
  This problem affects an increasing number of taxpayers. According to 
recent press reports in the Wall Street Journal and USA Today, prior to 
2003, an average of 5 to 8 percent of 1099 forms required correcting. 
That number has since jumped to an average of 13 percent, translating 
into millions of amended 1099s being sent to taxpayers each year.
  My legislation would extend the deadline for sending 1099 forms to 
taxpayers to February 15, by which time the vast majority of required 
data will be available to ensure the accuracy of the forms. The bill 
extends the deadline only for certain types of 1099 forms used to 
report investment income; it would not extend the deadline for 1099 
forms sent to independent contractors or for statements that only 
report interest earned on bank deposits. Accordingly, this extension 
will not delay filing for the vast majority of taxpayers.
  This year, the IRS granted several brokerage firms an extension to 
the January 31 deadline. However, this bill would provide a permanent 
extension for all firms and financial institutions to remove the 
uncertainty for taxpayers that arises due to this unnecessarily early 
deadline. My bill will help taxpayers by reducing confusion, the 
financial industry by cutting costs and waste, and the environment by 
eliminating millions of unnecessary mailings.
  I hope that my colleagues will join me in supporting this 
legislation, and I look forward to working with other Finance Committee 
members to have it considered during the 110th Congress. Mr. President, 
I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                 S. 636

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Reduce Wasteful Tax Forms 
     Act of 2007''.

     SEC. 2. EXTENSION OF REPORTING PERIOD FOR CERTAIN STATEMENTS 
                   SENT TO TAXPAYERS.

       (a) In General.--The following provisions of the Internal 
     Revenue Code of 1986 are each amended by striking ``January 
     31'' and inserting ``February 15'':
       (1) Subsection (c) of section 6042 (returns regarding 
     payments of dividends and corporate earnings and profits).
       (2) Subsection (d) of section 6043A (returns relating to 
     taxable mergers and acquisitions).
       (3) Subsection (e) of section 6044 (returns regarding 
     payments of patronage dividends).
       (4) Subsection (b) of section 6045 (returns of brokers).
       (5) Subsection (b) of section 6050N (returns regarding 
     payments of royalties).
       (b) Statements Regarding Certain Returns Relating to 
     Securities.--Section 6041(d) of the Internal Revenue Code of 
     1986 is amended by striking ``January 31'' and inserting 
     ``January 31 (February 15, in the case of statements 
     regarding returns relating to payments made by financial 
     institutions to customers in connection with securities 
     (including securities lending))''.
       (c) Statements Relating to Certain Substitute Payments.--
     Section 6045(d) of the Internal Revenue Code of 1986 is 
     amended--
       (1) by striking ``at such time and'', and
       (2) by inserting after ``other item.'' the following new 
     sentence: ``The written statement required under the 
     preceding sentence shall be furnished on or before February 
     15 of the year following the calendar year during which such 
     payment was made.''.
       (d) Statements Regarding Certain Reports by Employers and 
     Plan Administrators.--Section 6047(d)(2) of the Internal 
     Revenue Code of 1986 is amended by inserting ``, except that 
     any report to any person other than the Secretary shall be 
     furnished on or before February 15 of the year following the 
     calendar year for which the report under paragraph (1) was 
     required to be made'' after ``regulations''.
       (e) Certain Statements Relating to Interest Payments.--
     Section 6049(c)(2)(A) of the Internal Revenue Code of 1986 is 
     amended by striking ``January 31'' and inserting ``February 
     15 (January 31, in the case of any statement regarding a 
     return relating to payments of interest made by any obligor 
     described in subparagraph (B) or (C) of subsection (b)(1), 
     unless such statement is combined in a statement the due date 
     for which is February 15)''.
       (f) Effective Date.--The amendments made by this section 
     shall apply to returns, reports, and other statements the due 
     date for which (determined without regard to extensions) is 
     after December 31, 2007.
                                 ______