U.S. Senators John Thune (R-S.D.) and Maria Cantwell (D-Wash.), both members of the Senate Finance Committee, today introduced bipartisan legislation, the 1099K Overreach Prevention Act, to prohibit the Internal Revenue Service (IRS) from implementing a burdensome new tax reporting requirement on American merchants and small businesses. Congressmen Aaron Schock (R-Ill.) and Bobby Schilling (R-Ill.) introduced companion legislation in the House of Representatives on February 1, 2012.
"The overreaching and unnecessary 1099K tax reporting requirement will create a paperwork nightmare for small businesses already struggling in a weak economy," said Thune. "We need to unleash America's job creators, not hamstring them with a new government paperwork mandate that takes away limited resources that would otherwise be used to make investments and add workers. Our legislation will ensure that taxpayers are permanently protected from this burdensome, job-killing IRS paperwork mandate in the future."
"Small businesses create more than two thirds of all new jobs and drive our state's economic growth," said Cantwell. "This bipartisan measure will relieve many small businesses from burdensome tax reporting requirements that could be costly and very time consuming. Repealing this requirement is a common-sense approach to support the small businesses that create jobs on Main Street."
The IRS' proposed mandate would require all businesses that accept credit cards or other third-party payments, such as from PayPal, to reconcile their gross income with the aggregate amount of their credit card transactions. This IRS mandate will go far beyond the intent of the reporting obligation included in the Housing and Economic Recovery Act of 2008 and will impose a very large and expensive new paperwork and accounting headache on businesses, which is especially problematic for small businesses.