IRS Requests Comments on New 1099 Reporting Requirements

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July 13, 2010

The Patient Protection and Affordable Care Act of 2010 amended section 6041(a) of the Internal Revenue Code to require expanded information reporting requirements. Beginning January 1, 2012, businesses, including exempt organizations, making payments to corporations for purchases of goods and services totaling more than $600 will need to furnish a Form 1099 both to the IRS and vendor.

According to Notice 2010-51, the IRS intends to publish guidance that will implement the new rules to minimize burden and avoid duplicative reporting.

Treasury and IRS have already proposed a rule to allow an exception from section 6041 reporting for payment card transactions (otherwise reportable under section 6050W), effective for payments beginning in 2011. Therefore, institutional purchases made with payment cards will be exempt from the new 1099 reporting requirement.

IRS specifically wants comments on how the burden of the new reporting requirements impacts different types of businesses and organizations. The Service is also requesting comments on the appropriate timing and manner of reporting to IRS and what, if any, changes might be needed to the existing 1099 reporting practices or to the Form W-9, Request for Taxypayer Identification Number (TIN) and Certification, and the rules for soliciting TINs.

Working with the Tax Council, NACUBO will develop and submit comments on behalf of member institutions. Comments are due to IRS by September 29, 2010.