[Congressional Record (Bound Edition), Volume 156 (2010), Part 9]
[House]
[Pages 12861-12862]
[From the U.S. Government Publishing Office, www.gpo.gov]




                  MANY MORE 1099'S FOR SMALL BUSINESS

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from Michigan (Mr. Upton) is recognized for 5 minutes.
  Mr. UPTON. Madam Speaker, it was a few months ago that Congress 
passed and the President signed this health care bill; 2,700 pages that 
I don't think a lot of people read. But if you did read it, you might 
have gotten to this one section, section 9006, and I will just read it 
very quickly.
  ``Expansion of Information Reporting Requirements. In General--
Section 6041 of the Internal Revenue Code of 1986 is amended by adding 
at the end the following new subsections:
  ``(h) Application to Corporations.--Notwithstanding any regulation 
prescribed by the Secretary before the date of the enactment of this 
subsection, for purposes of this section the term `person' includes any 
corporation that is not an organization exempt from tax under section 
501(a).
  ``(i) Regulations.--The Secretary may prescribe such regulations and 
other guidance as may be appropriate or necessary to carry out the 
purpose of this section, including rules to prevent duplicative 
reporting of transactions.''.
  (b) Payments for Property and Other Gross Proceeds.--Subsection (a) 
of section 6041 of the Internal Revenue Code of 1986 is amended--
  (1) by inserting ``amounts in consideration for property,'' after 
``wages,'',
  (2) by inserting ``gross proceeds'' after ``emoluments, or other'', 
and
  (3) by inserting ``gross proceeds,'' after ``setting forth the amount 
of such''.
  (c) Effective Date.--The amendments made by this section shall apply 
to payments made after December 31, 2011.''
  A lot of gobbledygook, right? Anybody here know what that means? No, 
they don't. Let me tell you what it means. That section that I just 
read, even if you read it before we voted on the House floor, is a 
requirement that every business in America, beginning January 1 of next 
year, 2011, will have to file a 1099-MISC for any transaction that 
exceeds $600 during the course of the year.
  So what does that mean? You've got a business that goes to Staples. 
They're going to have to keep track of every transaction that they 
made. If you buy, as a business, $50 a month from Staples, you are 
going to have to file a 1099. If you've got a sales force, maybe they 
go out to a bunch of hotels or restaurants during the course of the 
year, you are going to have to find every one of those for all of your 
employees.
  During this recent break that we were home, I met with one of my 
small business people in Michigan. Last year, they filed 10 1099s. They 
figure that next year--they have, I don't know, 30 people that work for 
them--they are going to have to file 350 1099s. Any business 
transaction that exceeds $600 over the course of the year, they are 
going to have to file a 1099.
  And what does that have to do with health care? How does that help 
the employees that are working there? Maybe they will have to hire some 
more people to fill out the 1099s, and they are going to be covered. 
Well, that's just crazy. This is a new regulation that's going to be 
put on businesses. It's going to cost a lot more money. If anything, 
it's going to take away from folks that have health care in America.
  Now, we have some good news. There is a bill. My colleague Dan 
Lungren from California introduced a bill, H.R. 5141, the Small 
Business Paperwork Mandate Elimination Act. Just on the title, you know 
what that means versus what I just read at the beginning of my remarks. 
It takes this away. What the heck are we going to be collecting that 
information for? Well, somewhere else--I don't know what page it's in 
here, but of course it calls for the hiring of 15,000 more IRS agents. 
Maybe that's why they have to hire them, so they can look at all these 
1099s that every business is going to have to file.
  Now remember, when you do a 1099, it's more than just the amount. 
You're going to have to go get the Employer Identification Number for 
every business that you made that purchase. So, as I talked to my 
Kalamazoo homebuilders the last couple of times over the last couple of 
weeks, if they just happen to take their pickup and fill up at that 
Marathon or Speedway station every other week and it's going to be more 
than $600 over the course of the year, they are going to have to get 
that Employer Identification Number and keep track of all those gas 
records. Think about the utilities, Consumers Energy, American Electric 
Power, I&M. All of the utility companies will have to do a separate 
1099 for every business that they serve if they sell

[[Page 12862]]

more than, in essence, $50 worth of electricity a month to them.

                              {time}  1920

  What a nightmare.
  Now, some might suggest that this is the first step to a VAT tax. 
That's right. The IRS now is going to assemble all this information and 
maybe--and remember, it says it's effective in 2012, but that means you 
have to start filing beginning January 1, only 5 or 6 months from now. 
It's the first step. It's the wrong step. We need to repeal it.

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