Paperwork Burdens in New Health Care Law

By Doug Loon
VP Regional Affairs
U.S. Chamber of Commerce

Businesses, large and small, have many questions regarding the 2400-page health care reform bill – the Patient Protection and Affordable Care Act (PPACA) - that became law earlier this year. The complex legislation has made sweeping changes to our country’s health care system and will impose many new requirements and mandates for employers. The U.S. Chamber of Commerce believes one in particular, unrelated to health care, should be repealed immediately. Included in Section 9006 of the PPACA is a provision that greatly expands the requirement for businesses to file information returns to the IRS. The provision was used as an unrelated “pay for” in the PPACA and we believe it should be rescinded based on the merits of the provision alone.

Starting in 2012, companies of all sizes will have to file a Form 1099-MISC with the IRS for all payments made to businesses in the 2011 calendar year, aggregating $600 or more for the purchase of property (goods) and services. The new law lifted the exemption for purchases from corporations and expanded the requirement to include property (goods).

Unless this section is repealed, businesses across the nation will be subjected to the folly of data collection and information filing on virtually all business-to-business transactions they make aggregating $600 or more in a year. This, at a time when many can least afford it. When the United States is depending on the small business community to generate jobs and grow the economy, lawmakers are diverting their precious time and resources to collecting volumes of information and filling out mounds of new paperwork for the government.

If implemented, Section 9006 of the PPACA will also have a chilling effect on new business relationships, most of which will be small businesses and startups. We fear that many businesses, in an attempt to reduce data collection and paperwork burdens, will simply reduce vendors and refuse to entertain new business dealings. This will have a disproportional impact on small businesses and entrepreneurs attempting to get a foot in the door.

The ultimate irony of these new burdens is that the IRS neither has the resources nor the ability to use the new information to reconstruct an accurate picture of a company’s revenues since a large volume of business-to-consumer transactions are not reported. While the vast majority of compliant taxpayers will bear the cost of implementing this law, it will have only minimal benefit as a government tool in reducing non-compliance.

H.R. 5141, the “Small Business Paperwork Mandate Elimination Act,” would repeal these onerous paperwork burdens imposed on business by this ill-conceived mandate. We urge business leaders to call their member of congress and urge support for this bill to repeal this onerous provision of the new health care law.