Daily Tax Update - April 14, 2011: Obama Signs Bill Repealing Enhanced Form 1099

OBAMA SIGNS BILL REPEALING ENHANCED FORM 1099 REPORTING REQUIREMENTS:  Today, President Obama signed legislation (H.R. 4) into law that repeals language from the 2010 health care law (Pub. L. No. 111-148) requiring businesses to issue a Form 1099 for payments to corporations for goods and services that exceed $600 per year to each vendor. It also repeals an expansion of those rules to include landlords, which was enacted under a small business law (Pub. L. No. 111-240).

  • Obama said, "Small business owners are the engine of our economy and because Democrats and Republicans worked together, we can ensure they spend their time and resources creating jobs and growing their business, not filling out more paperwork.  I look forward to continuing to work with Congress to improve the tax credit policy in this legislation and I am eager to work with anyone with ideas about how we can make health care better or more affordable."

COMMON MISTAKES TO AVOID WHEN FILING TAX RETURNS:  Today, the IRS reminded taxpayers to review their tax returns for common errors that could result in delayed refunds.

  • The IRS recommendations include:  file electronically, remember the Making Work Pay tax credit, mail returns to the correct address, check only one filing status, double check all figures, verify the correct routing and account numbers, sign and date the returns, attach forms to the front of the return, and request an extension if needed. 
  • You can request an extension of time to file, which will automatically give you until October 17, 2011 to submit your tax return.  The IRS reminded taxpayers that an extension of time to file is not an extension of time to pay.  All outstanding balances are due on April 18, 2011.
  • Additional information can be accessed here.
  • Information on requesting an extension can be accessed here.

Notice 2011-38 announces an extension and modification of the pilot program announced in Notice 2009-93, 2009-51 I.R.B. 863, which authorized filers of certain information returns to truncate an individual payee's nine-digit identifying number on specified paper payee statements furnished for calendar years 2009-2010, if the filers met certain requirements.

1. [112nd] H.R.1526: To amend the Internal Revenue Code of 1986 to except from the early distribution penalty certain qualified retirement plan distributions used to purchase a residence that has been in foreclosure for a year or more.
Sponsor: Rep Posey, Bill [FL-15] (introduced 4/13/2011)    Cosponsors (None)
Committees: House Ways and Means
Latest Major Action: 4/13/2011 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

2. [112nd] H.R.1527: To amend the Internal Revenue Code of 1986 to require the Secretary of the Treasury to provide each individual taxpayer a receipt for an income tax payment which itemizes the portion of the payment which is allocable to various Government spending categories.
Sponsor: Rep Quigley, Mike [IL-5] (introduced 4/13/2011)    Cosponsors (4)
Committees: House Ways and Means
Latest Major Action: 4/13/2011 Referred to House committee. Status: Referred to the House Committee on Ways and Means

As provided for in Treasury regulations, advice (if any) relating to federal taxes that is contained in this communication (including attachments) is not intended or written to be used, and cannot be used, for the purpose of (1) avoiding penalties under the Internal Revenue Code or (2) promoting, marketing or recommending to another party any plan or arrangement addressed herein.

Steptoe & Johnson LLP has one of the largest and most diverse law firm tax practices in the country.  The practice covers the entire spectrum of federal taxation, including representation of businesses before the Congress, Treasury and the national office of the IRS; transactional planning for domestic and multinational corporations; complex audit and controversy work for corporations and other business interests contesting IRS adjustments; litigation before the Tax Court, Court of Federal Claims, district courts, courts of appeals and the Supreme Court.  The firm's tax practice also encompasses all aspects of employee benefits (ERISA), executive compensation, tax-exempt organizations and charitable giving.  Steptoe has an extensive state and local tax practice, representing an array of business clients on complex sales and use tax, corporate income tax and property tax matters, both advising those clients and handling audits, administrative appeals, and litigation for them.  Read more information on Steptoe's tax practice.