Tuesday, November 2, 2010

My Senator Replied

So, I complained to my senators and reps about the new requirements on companies to report all payments for good and servies over $600. It would have been a mess. One replied:

Dear Mr. Harmon:

Thank you for contacting me to express your concerns about increased tax reporting requirements in health care reform legislation. I appreciate hearing your thoughts about this issue and I apologize for the delay in my response.

As you know, President Obama signed two health reform bills into law; the Patient Protection and Affordable Care Act (Public Law No. 111-148), and the Health Care and Education Reconciliation Act (Public Law No. 111-152). I supported these pieces of legislation because they will expand access to care to millions of Americans and end abusive insurance industry practices, all while reducing the deficit by an expected $1.4 trillion over the next 20 years.

As part of a package of measures to finance these reforms, the legislation included increased reporting requirements to reduce the country's $348 billion annual tax shortfall, known as the "tax gap." Specifically, the law requires businesses to inform the Internal Revenue Service (IRS) of all purchases of goods or services made in excess of $600 per year, starting in 2012. Previously, the IRS only required businesses to file such forms on payments made to individuals.

I share your concerns that these requirements will impose a significant and undue burden on small businesses. I recently supported an amendment to the "Small Business Jobs and Credit Act of 2010" (H.R. 5297), which would have raised the payment threshold from $600 to $5,000 and exempted businesses with fewer than 25 employees from reporting payments on goods and property. Unfortunately, this amendment failed to muster the necessary votes for passage. A second amendment, introduced by Senator Mike Johanns (R-NE), would have eliminated all reporting requirements but it also failed to pass. I opposed this amendment because it sought to offset the loss of revenue by abolishing the $15 billion Prevention Trust Fund, which was established to expand Americans' access to preventive services.

You may be pleased to know, however, that on September 14, 2010 Senator Mary Landrieu (D-LA) introduced the "Information Reporting Modernization Act of 2010" (S. 3783). This legislation would lift the reporting requirement from $600 to $5,000 and would adjust this requirement periodically for inflation. Furthermore, it would eliminate redundancy by exempting payments made via payment card or through third party network transactions. I have indicated to Senator Landrieu my desire to co-sponsor this legislation.

Once again, thank you for writing. Please know that I will keep your comments in mind as this and future proposals related to tax reporting requirements are debated before the Senate. If you have any further questions, please do not hesitate to contact my Washington, D.C. office at (202) 224-3841. Best regards.

Sincerely yours,
Dianne Feinstein
United States Senator

It sounds like some people are trying to change it. I understand that a politician's word is worth only the air it takes to speak, but lets see what happens.

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