Advocates of Obama-Care might have a change of heart when they hear about a previously little-known footnote that could pose an almost insurmountable burden on over 30 million small businesses.  The law mandates that companies file a Form 1099 for any-and-all business-to-business transactions exceeding $600 annually

The bill was added to the original health care reform legislation and went pretty much under the radar.  Its purpose was to put an end to so-called tax gaps resulting from unreported business income.  But IRS National Taxpayer Advocate Nina Olson exposed the mandate as being a huge burden which would do nothing to improve taxpayer compliance.

The ranking Republican in the House Ways and Means Committee attempted to put the measure on the chopping block just before the August recess, but Speaker Nancy Pelosi pulled a slick end-around that prevented a Democratic mutiny that would have killed the new 1099 compliance law.

By adding the bill to the House Suspension Calendar, a two-thirds majority would be needed for it to become law.  The final vote went mostly along party lines, and passed a couple new taxes as well.  This way those who voted in favor could hide behind the need to push the other legislation through, regardless of their position on the 1099 compliance mandate.

The US Chamber of Commerce sent a letter to congress urging them to repeal the new requirement.  “If this provision is implemented, the 1099 reporting mandate will impose substantial paperwork and reporting burdens on the backs of governments, nonprofits and businesses — especially small businesses,” the letter states, adding that the requirement will create a whole new layer of compliance that will be costly to these organizations.