During a recent mark-up, the Ways and Means Committee approved two bills that would replace a widely criticized business-tax reporting requirement in the 2010 health care law. On a party-line 21-15 vote, the Committee approved H.R. 705 which is fully offset and would eliminate a tax reporting requirement for businesses and owners of rental real estate. The panel also approved H.R. 4 that would similarly strike the provision in the health care law that requires businesses to file an IRS form 1099 for every vendor to whom they pay more than $600 a year. However, that measure does not include an offset.
Congressional Members from both parties, as well as President Obama, agree that the law should be changed to remove the reporting requirement, which is set to take effect in 2012. They differ on how to make up the $19.2 billion in tax revenue that the 1099 provision is estimated to produce over 10 years.
Ways and Means Democrats objected to the fully offset bill, which would be paid for by allowing the government to recapture a larger share of overpayments to consumers receiving health insurance subsidies for the new health insurance exchanges.
Republicans rejected the claim and said the provision would prevent individuals from receiving thousands of dollars in health care subsidies to which they were not actually entitled. In a related development, Sen. Johanns, R-Neb., who has led efforts in the Senate to strike the provision, introduced S. 358 which is identical to the bill reported by the Ways and Means Committee “in hopes that it might get it to the president’s desk more quickly.”