An expanded 2012 tax reporting requirement that was seen as a burden to coin dealers, collectors and other small businesses has now been removed thanks to legislation signed into law (Public Law 112-009) on Thursday, April 14, by President Barack Obama.
Called the Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act of 2011 or bill number H.R. 4, the measure was hailed by small business owners around the nation as righting a perceived wrong.
If left unchanged, the expanded tax provision would have meant that payments in excess of $600 would have required parties involved to complete an IRS form 1099. While the additional bookkeeping would have been applicable to all businesses, it was seen as especially burdensome to the coin community.
Many coin transactions can easily top the $600 threshold, especially for coins composed of precious metals. For example, if a coin dealer were to buy a single one ounce American Gold Eagle, the recent market price of gold at near $1500 an ounce would require a 1099 to be completed. Adding to the paperwork nightmare, transactions would have had to be watched over time. A coin dealer would have been required to track and report payments to a vendor that exceeded $600 a year.
The requirement had been controversial since it was first included as part of the Patient Protection and Affordable Care Act that became law in 2010. Congress had made other attempts to repeal that portion of the law, but all failed until the Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act of 2011. The legislation passed in the House of Representatives on March 3, 2011 with a vote of 314 to 112. Its support in the Senate was overwhelming as well when it passed without amendment on April 5 with a vote of 87 to 12.
After uproar built following news of the expanded reporting requirement, President Obama alluded to his support of its removal from the Patient Protection Act earlier in the year.
"We can start right now by correcting a flaw in the legislation that has placed an unnecessary bookkeeping burden on small businesses," stated President Obama during his 2011 State of the Union Address on January 25, 2011.
Obama later said in a statement: "Today, I was pleased to take another step to relieve unnecessary burdens on small businesses by signing H.R. 4 into law. 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."
Many also applauded the fact that the 1099 reporting requirement was removed early in the year, halting the expense that businesses would have shouldered in having to prepare for its implementation in 2012.
