In her report to Congress, the National Taxpayer Advocate Nina Olson expressed her concern about requiring businesses to submit an IRS Form 1099 to every entity that receives more than $600 per year for goods or services.

As explained in a previous post, beginning on January 1, 2012, the healthcare overhaul signed into law by President Obama made a number of changes to the tax laws.

According to the NTA report, the new 1099 reporting requirement “would apply to businesses of all sizes, charities and other tax-exempt organizations, and government entities,” including:

• 26 million non-farm sole proprietorships;
• 4 million S corporations;
• 2 million C corporations;
• 3 million partnerships;
• 2 million farming businesses;
• 1 million charities and other tax-exempt organizations; and
• probably more than 100,000 federal, state, and local government entities.

Unfortunately, as the IRS website notes, the report of the National Taxpayer Advocate states that the 1099 reporting burdens “may turn out to be disproportionate as compared with any resulting improvement in tax compliance.”