ADA News
Dental coalition urges repeal of tax reporting measure
Washington—An organized dentistry coalition's nine organizations told Rep. Daniel Lungren (R-Calif.) they "enthusiastically support" his bill to repeal a health reform tax provision "that greatly expands the conditions under which businesses are required to file 1099 tax forms.
"The change would have a significant adverse effect on many dental practices," the coalition said in a June 21 letter. "As small businesses, very few dental practices have the staff resources to absorb the extra workload required to meet the new mandate."
Inserted as a revenue measure in the health care reform law, Section 9006 of Public Law 111-152 amends the tax code to require that businesses report to the IRS payments made to any vendor after Dec. 31, 2011, that exceed $600 a year. The section is entitled, Expansion of Information Reporting Requirements.
"Tracking payments to certain individuals for services as well as for services and goods purchased from all individuals and corporations with annual payments of $600 or more will very likely require a dentist to collect the name and taxpayer identification number of virtually every supplier," the coalition said. "Dental practices would have to absorb the administrative costs or pass the expenditures along to patients, unnecessarily increasing dental costs at a time of overall rising health care costs."
"Health-Care Bill Surprise: 1099 Nightmare," Bloomberg Businessweek headlined a May 27 report. Rep. Lungren characterized the provision as "nothing more than a universal snitch tax. It requires all Americans to give up information on somebody else," he said April 27 in a statement on the House floor.
Rep. Lungren's bill "to repeal the expansion of information reporting requirements for payments of $600 or more to corporations" had 87 bipartisan but primarily Republican cosponsors by recent count. His Small Business Paperwork Mandate Elimination Act was referred to the tax-legislating House Ways and Means Committee.
Currently, businesses issue 1099-MISC forms for payments for services purchased from individual persons such as independent contractors. The new provision requires 1099 reporting to the IRS of payments for goods and services to individuals and corporations if the total annual payments to a given vendor exceed $600.
"The dental organizations listed below enthusiastically support your efforts and look forward to working with you and your staff to move H.R. 5141 through the legislative process as soon as feasible," said the letter signed by the Academy of General Dentistry, American Academy of Oral & Maxillofacial Pathology, American Academy of Pediatric Dentistry, American Academy of Periodontology, American Association of Endodontists, American Association of Oral and Maxillofacial Surgeons, American Association of Orthodontists, American College of Prosthodontists and American Dental Association.
