Business Owners Fear New Health Care Requirement

A little-known section of the new health care law will require businesses to file additional tax forms.

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A little-known provision in the new health care law could bring big headaches for business owners.

Section 9006, which takes effect January 1, 2012, will require all U.S. companies to issue 1099 tax forms not just to contract workers, but to all companies and individuals they work with -- if the companies purchase more than $600 in goods or services from them. For example, if a business owner takes a company car to a mechanic for $1,000 in repairs, he or she would then have to send a 1099 to the mechanic.

The IRS estimates that the federal government loses more than $300 billion every year in tax revenue on income that goes unreported, and this new law is designed to plug that hole, CNN reports. Proponents of Section 9006 say that the measure is a way of ensuring more revenue will come in, without actually raising taxes. But critics fear that business owners and others will become buried in paperwork as a result.

Rep. Dan Lungren (R-Calif.) recently introduced legislation called the Small Business Paperwork Mandate Elimination Act, designed to repeal Section 9006.

Tags: 1099, Congress, health care law, health care reform, IRS, news, Obama, Section 9006, section 9006 of the health care law, taxes

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