IRS Seeks Advice from Small Business

The Internal Revenue Service is inviting businesses to suggest ways to minimize the burden of a new law that requires them to file annual reports for every corporation that receives more than $600 from them in payments for goods and services.

The new requirement, designed to make sure corporations don't hide any of their income from the IRS, goes into effect in 2012. It was included in the health care reform law as a way to raise money to help pay for the legislation.

Business groups have complained the new requirement will force some small businesses to file dozens or even hundreds of additional 1099 forms a year. Many support legislation that would repeal the provision.

The IRS and the Treasury Department have announced plans to ease some of this burden by exempting purchases made through credit cards or debit cards from the 1099 reporting requirement. That's because the IRS already will receive reports on these payments from banks and card-payment processors. That regulation is expected to become final later this summer, according to the IRS.

Now the agencies want comments "on additional circumstances in which duplicative reporting might otherwise occur," according to a notice published July 1. "Specific comments are also requested regarding the burden associated with implementing the new reporting requirements for different types of taxpayers and businesses."

The deadline for submitting comments is September 29.