Baucus, Tester introduce bill to cut small business paperwork burden

Senators Push to Repeal 1099 Reporting Requirements So Montana Businesses Can Focus on Jobs

(Washington, D.C.) – Montana’s U.S. Senators Max Baucus and Jon Tester introduced legislation today to eliminate new Form 1099 paperwork requirements and free up resources for Montana small businesses to grow and create jobs.  Baucus originally introduced this bill last November, with the support of the Montana Chamber of Commerce and the National Federation of Independent Business, after hearing concerns from Montana businesses that the new requirements created too large of an administrative burden.
 
“Helping businesses create jobs is our number one priority, and this bill is a simple, common-sense way to do just that,” said Baucus, author of the Small Business Jobs Act.  “Small businesses are the backbone of our economy, especially in Montana where we have more workers employed by small businesses than anywhere else in the country.  Montana businesses have made clear these paperwork requirements won’t work for them.  This bill will eliminate added paperwork burdens so Montana businesses can focus their resources on growing and hiring new workers.”

“During my five small business workshops across Montana last year, I heard the need to make sure Montana’s small businesses have every tool possible to keep creating jobs and putting more folks back to work—and I support cutting red tape that gets in the way of that,” Tester said.  “That’s why I voted to undo this reporting requirement twice last year, and I’ll keep working to get it done this year.”

The reporting requirement is not scheduled to take effect until 2012.  However, following passage of the law in 2010, Montana business owners expressed concern that when the provision does go into effect, the forms would place a heavy paperwork burden on small businesses, which is particularly troubling in Montana where 97 percent of all workers are employed by small businesses.  In response to Montana businesses, Baucus introduced the bill to repeal the new requirements last Congress and has been fighting to pass it ever since.

The reporting requirement, referred to as “1099” because it would require businesses to file Form 1099 with the IRS to report payments made to corporations for goods and certain services, was proposed by the Bush administration to help better keep track of what businesses spend and earn, which in turn helps better keep track of what they owe in taxes. 
 
The U.S. Treasury Department estimates that more than $345 billion in owed taxes go unpaid each year, adding to the federal deficit.  The 1099 information reporting requirement was passed in hopes that better information would help the IRS collect more of those unpaid taxes and keep taxes lower for all taxpayers. 

As chairman of the Senate Finance Committee, with sole jurisdiction over the tax code, Baucus has vowed to work to repeal the new reporting requirement for Montana businesses and look for other ways to improve tax compliance and keep taxes low.