WASHINGTON – There is one small part of the Affordable Care Act that both Republicans and Democrats seem to agree on: A desire to repeal the provision that requires small businesses, including physicians, to file an IRS 1099 form for each vendor purchase of $600 or more.
A bill repealing the 1099 provision has passed both the House and the Senate this year, with more than three-quarters of Congress showing support. In his State of the Union speech on January 25, President Barack Obama said the provision was a mistake and should be repealed. "We can start right now by correcting a flaw in the legislation that has placed an unnecessary bookkeeping burden on small businesses," he said.
Only one problem remains: The price tag.
A repeal of the IRS 1099 provision carries with it $19 billion in lost tax revenues. On Capitol Hill, where budget battles are molten and Congress struggling with fiscal year 2012 budget differences, that could put a damper on things.
[See related stories: Poll: Employers want guidance on - not a repeal of - healthcare reform; Senate repeals IRS 1099 physician reporting requirements]
The Senate version of the bill, introduced by Sen. Debbie Stabenow (D-Mich.), passed on February 2. "Rather than focusing on issues that divide us, this is an issue that we can all come together on," Stabenow said. "If left unchecked, 40 million small businesses would see their IRS 1099 paperwork increase 2,000 percent."
Passage of Rep. Dan Lungren's (R-Calif.) House version came a month later.
There's no shortage of support for doing away with the provision. The American Medical Association has been joined by the U.S. Chamber of Commerce, National Association of Manufacturers, American Farm Bureau, National Association of Realtors and other organizations in supporting the repeal.
"It is estimated that paperwork already takes up as much as a third of a physician’s workday – time that could be better spent with patients – and this provision would only increase that burden," said AMA President Cecil Wilson, MD.
On the House floor on March 3, Ways and Means Committee Chairman David Camp (R-Mich.) summed up the frustration: "Some have even gone so far to say there have been 1,099 votes to repeal 1099s."
