Patient Protection and Affordable Care Act (in PDF)
This legislation significantly impacts regulatory requirements for virtually every organization that issues 1099 information returns.
Section 9006, which is appended below, changes the definition of the word "person" to include "any corporation that is not an organization exempt from tax under section 501(a)":
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SEC. 9006. EXPANSION OF INFORMATION REPORTING REQUIREMENTS. (a) 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 purposes 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. |
The original Subsection (a) of section 6041 of the Internal Revenue Code reads:
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Sec. 6041.
Information at source (a) Payments of $600 or more
All persons
engaged in a trade or business and making
payment in the course of such trade or
business to another person, of rent,
salaries, wages, premiums, annuities,
compensations, remunerations, emoluments, or
other fixed or determinable gains, profits,
and income (other than payments to which
section 6042(a)(1), 6044(a)(1), 6047(e),
6049(a), or 6050N(a) applies, and other than
payments with respect to which a statement
is required under the authority of section
6042(a)(2), 6044(a)(2), or 6045), or $600 or
more in any taxable year, or, in the case of
such payments made by |
Inserting ‘‘amounts in consideration for property,’’ after ‘‘wages,’’ and performing (2) and (3), the new revised Internal Revenue Code becomes:
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Sec. 6041.
Information at source (a) Payments of $600 or more All persons engaged in a trade or business and making payment in the course of such trade or business to another person, of rent, salaries, wages, amounts in consideration for property, premiums, annuities, compensations, remunerations, emoluments, or other gross proceeds, fixed or determinable gains, profits, and income (other than payments to which section 6042(a)(1),6044(a)(1), 6047(e), 6049(a), or 6050N(a) applies, and other than payments with respect to which a statement is required under the authority of section 6042(a)(2), 6044(a)(2), or 6045), or $600 or more in any taxable year, or, in the case of such payments made by the United States, the officers or employees of the United States having information as to such payments and required to make returns in regard thereto by the regulations hereinafter provided for, shall render a true and accurate return to the Secretary, under such regulations and in such form and manner and to such extent as may be prescribed by the Secretary, setting forth the amount of such gross proceeds, gains, profits, and income, and the name and address of the recipient of such payment. |
What does this all mean?
I am the president of a small business in Wisconsin. At the end of the year, I gather up all my income and expenses and I subtract expenses from income and hope that there is a profit.
If I hired someone during the fiscal year and paid more than $600 for their service, I have to issue a 1099-MISC to that individual. Under this new law, in addition to issuing 1099s to individuals, companies are now required to file 1099s for every corporation from whom they purchase more than $600 worth of goods or services in a given fiscal year. And each business/individual will receive a 1099 from each business to which you sold over $600 of goods or services.
This will create increase the amount of paperwork for small businesses across the country.
