Obamacare included a provision requiring businesses to meet new, expanded 1099-MISC reporting requirements that were hideous. Fortunately, the Senate has taken the first step to repeal them.

Obamacare is a very controversial piece of legislation. Everyone has a view on it and so do I. I’ll skip that debate for the moment though and focus on some of the problems that arose with the funding side of the debate. For all the criticism directed at the new law, one area where it did not fall short was in funding. This was a law that actually paid for itself, but the payment provisions were brutal. 

One area of focus was the so called tax gap. Each year, the IRS reports that American individuals and businesses essentially under report some $400 million in taxes. The new healthcare law contained a provision that sought to close this gap and, thus, pay for the healthcare being provided. This would be done by requiring 1099-MISC filings for pretty much any payments made in a year totaling more than $600. This means if you go to a store and buy a new laptop for $650, you have to 1099 the store.

Yes, brutal.

As you can imagine, small business associations went through the roof. Heck, big business groups screamed as well and forests quivered in fear. It was setting up to be the ultimate boondoggle of red tape that would probably accomplish nothing given the sheer amount of paperwork that would be produced. The IRS was even known to be less than enthusiastic about the new approach. 

Fortunately, the news out of the Washington, D.C., is good. The new 1099-MISC provisions have been repealed by the Senate. The House of Representatives is expected to vote on and support the bill soon. Unless he is completely out of his mind, President Obama will then sign the bill into law and we can all take a deep breath and relax. 

That is until some politician comes up with another idiotic method for taking your money.