Health Care Fight Heats Up Over New Tax : Shots - Health News A battle is being waged by small businesses, accountants, and members of Congress to repeal a new tax reporting requirement in the health law. But it could raise $16 billion for the government.
NPR logo Health Care Fight Heats Up Over New Tax Report Repeal Effort

Health Care Fight Heats Up Over New Tax Report Repeal Effort

For anyone dreaming that the health care overhaul political fight is taking a summer break, wake up.

Rather than risk an embarrassing vote on a GOP amendment to repeal a largely unpopular new tax reporting requirement, House Democrats pulled a much-touted jobs bill from the floor last night.

"This is an issue we want to address and now we have an opportunity to do so," Kristie Greco, a spokeswoman for House Majority Whip James Clyburn (D- SC)," told the Wall Street Journal. Democrats promise to review the provision and bring the bill back up as early as today.

So what's the deal with the dreaded new requirement?

The new health law requires businesses to file a 1099 form to the IRS for each corporate supplier and service provider whom they pay more than $600 a year. The concern is that this would include filing a 1099 for Apple if your business buys a mildly souped-up iPad.

"When small businesses are focused on filling out paperwork and filing more tax forms, they aren't focused on creating jobs," Rep. Dave Camp (R., Mich.), told the Journal. Camp sponsored the quashed GOP amendment.

And Camp's not alone. Small businesses and accountants are gearing up to fight the expanded reporting requirement, and it has support in the Senate.

Even our National Taxpayer Advocate Nina Olson (did you know we have one?) raised concerns about the burden it could place on businesses and the IRS, The Hill's On The Money blog reports.

The requirement "may turn out to be disproportionate as compared with any resulting improvement in tax compliance," Olson says in a recent report to Congress.

All this puts Democrats in a pickle. If they don't keep the new reporting requirement alive, it could cost the Obama Administration about $16 billion of what it was counting on to help pay for the health care law.