Much like the mythical phoenix, the 1099 repeal fails again and again, only to rise again from the ashes and take on new life. In the wake of Monday’s two failed repeal amendments, a prominent Senator expressed hope that the new reporting requirement could be repealed in a larger tax reform bill set to be passed in December.
Senator Charles Grassley (R-IA) told the Bureau of National Affairs (BNA) that Democrats and Republicans have been meeting since Tuesday to discuss a compromise repeal of the 1099. He told the reporter that senators from both parties agree the reporting requirement has to go but there is uncertainty about how a repeal will be passed.
A Senate Democratic leadership aide also told BNA that Democrats could be reasonably expected to include repeal language on any of the tax bills that could be considered before the chamber. The aide also noted that there was no agreement yet on how to offset the estimated $20 billion the provision was supposed to raise for health care reform, but the Congress has time to find agreement since the provision does not take effect until 2012. There are numerous expiring tax provisions (including personal income tax cuts, estate tax, and R&D credits) that could receive votes in the Senate this month, and the key is whether these issues will be lumped into a larger bill or voted separately.