The recently enacted Patient Protection and Affordable Care Act (the Act) will expand information reporting requirements starting in 2012. §9005 of the Act amends §6041 of the Internal Revenue Code of 1986 (IRC) so that payments to corporations that were previously exempted from reporting will now be subject to reporting on Form 1099. Additionally, information reporting will now be required for purchases of property. Therefore, businesses that pay a single entity $600 or more in a calendar year for purchases of goods and services will be required to report those payments on Form 1099.
Under the law, the IRS was granted the authority to issue so-called legislative regulations to “prevent duplicative reporting of transactions.” Since under a different provision also effective in 2012 payment processors will be required to report gross amounts paid to companies using debit and credit cards, IRS Commissioner Douglas H Shulman indicated in a recent speech that transactions that use credit or debit cards might be exempted from these reporting requirements.
Vision Payroll strongly recommends that businesses begin their implementation plan now to be ready to report under the new requirements and to be ready to reconcile the forms received from their customers. Vision Payroll is ready now to work with businesses on their implementation plan and will assist them in filing the necessary forms.