Washington, DC – Ways and Means Chairman Dave Camp (R-MI) today delivered opening remarks at the Committee on Ways and Means Markup of H.R. 4 and H.R. 705. Below is an excerpt, followed by the full remarks.
1099 Repeal is a Win for Small Businesses, Individuals and Families
“In my judgment, this is a win-win-win for taxpayers – it is a win for small businesses who won’t suffer under new 1099 reporting requirements, it is a win for individuals and families who may rent out property and could have faced a mountain of confusing paperwork, and it is a win for the taxpayers who were being asked to simply look the other way and allow tens of billions of their hard-earned dollars to be erroneously, wastefully and, in some cases, fraudulently handed out by the IRS when the new health care subsidies start in 2014.”
H.R. 4, the Small Business Paperwork Mandate Elimination Act of 2011, repeals one of the most often and widely criticized pieces of the Democrats’ health care law – the 1099 reporting requirements for small businesses. Republicans have called for its repeal from day one. And, I give my counterparts some credit here, because it didn’t take them long to follow suit. Even President Obama has endorsed getting rid of this onerous tax reporting requirement.
It had been my hope to build the legislative history of this bill, since I expect that H.R. 4, introduced by our colleague Dan Lungren, will ultimately be the bill number presented to us on the Floor, but procedural limitations prevent us from further amending this bill to include other important provisions.
As such, once we complete action on H.R. 4, we will immediately consider H.R. 705, the Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act. Like H.R. 4, H.R 705 repeals the burdensome 1099 tax reporting provision included in the Democrats’ health care law. However, there are two key additions: 1) a repeal of the additional 1099 reporting requirements that Democrats placed on owners of certain rental properties last year; and, 2) measures to reduce the deficit by reducing waste, fraud and abuse embedded in the health care exchange subsidy program.
First, the rental reporting requirements: To help pay for the Democrats’ small business lending law enacted in September of last year, Form 1099 reporting requirements were expanded even further than they were in the health care law. This new provision generally treats the recipient of rental income from real estate as engaging in the trade or business of renting property. This is the first time that Form 1099 requirements have ever been imposed on taxpayers who are not engaged in business activity. Individuals and families that rent real property – a vacation home, a condo, or even a spare bedroom – for even just a few weeks or months out of the year, now must comply with complex new filing requirements for everyone to whom they pay more than $600 in a year – like plumbers, furnace repairmen, cleaning services and the list goes on and on and on. It is a nightmare for taxpayers and it should be repealed. Let me especially thank Mr. Tiberi for his work in raising awareness of the impact of this requirement and the importance of repealing it in this legislation.
The second additional provision we will consider as part of H.R. 705 deals with recovering overpayments of health care Exchange subsidies. Under the new health care law, billions of taxpayer dollars will be spent each year on subsidies for individuals who do not qualify for them, some of that as a result of outright fraud. Congress took steps to close that off in December when we voted 409 to 2 to provide for greater recapture of improper payments as part of the temporary “doc fix” bill. To better protect American taxpayers, H.R. 705 will increase the maximum amount of health care subsidy overpayments that must be repaid. In rooting out this waste, fraud and abuse, we will save taxpayers $25 billion over the next 10 years.
When combined with the repeal of the two 1099 reporting provisions, the amended H.R. 705 will reduce the deficit by $166 million.
In my judgment, this is a win-win-win for taxpayers – it is a win for small businesses who won’t suffer under new 1099 reporting requirements, it is a win for individuals and families who may rent out property and could have faced a mountain of confusing paperwork, and it is a win for the taxpayers who were being asked to simply look the other way and allow tens of billions of their hard-earned dollars to be erroneously, wastefully and, in some cases, fraudulently handed out by the IRS when the new health care subsidies start in 2014.