Code Section 6041
| Code Section | Effective Date | Name of Act | Name of Provision | 10yr Revenue Estimate ($millions) |
|---|---|---|---|---|
| 6041 | 12/31/2011 | The Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act of 2011 | Repeal of Expansion of Information Reporting Requirements |
-21,905 |
| 6041 | 12/31/2011 | Patient Protection and Affordable Care Act | Expansion of Information Reporting Requirements | 17,100 |
| 6041 | 12/31/2010 | The Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act of 2011 | Repeal of Information Reporting Requirements with Respect to Real Estate Expenses | -2,811 |
| 6041 | 12/31/2010 | The Small Business Jobs Act of 2010 | Information reporting for rental property expense payments | 2,546 |
Repeal of Expansion of Information Reporting Requirements
Explanation of Provision
Under the provision, the changes to section 6041 enacted under section 9006 of the Patient Protection and Affordable Care Act that provide rules for payments to corporations, provide additional regulatory authority and impose a reporting requirement with respect to gross proceeds from property, are repealed in their entirety.
Expansion of Information Reporting Requirements 861
Explanation of Provision
Under the provision, a business is required to file an information return for all payments aggregating $600 or more in a calendar year to a single payee (other than a payee that is a tax-exempt corporation), notwithstanding any regulation promulgated under section 6041 prior to the date of enactment (March 23, 2010). The payments to be reported include gross proceeds paid in consideration for property or services. However, the provision does not override specific provisions elsewhere in the Code that except certain payments from reporting, such as securities or broker transactions as defined under section 6045(a) and the regulations thereunder.
Repeal of Information Reporting Requirements with Respect to Real Estate Expenses
Explanation of Provision
Under the provision, recipients of rental income from real estate who are not otherwise considered to be engaged in a trade or business of renting property are not subject to the same information reporting requirements as taxpayers who are considered to be engaged in a trade or business. As a result, rental income recipients making payments of $600 or more to a service provider (such as a plumber, painter, or accountant) in the course of earning rental income are not required to provide an information return (typically Form 1099–MISC) to the IRS and to the service provider.
Information reporting for rental property expense payments
Explanation of Provision
Under the provision, recipients of rental income from real estate generally are subject to the same information reporting requirements as taxpayers engaged in a trade or business. In particular, rental income recipients making payments of $600 or more to a service provider (such as a plumber, painter, or accountant) in the course of earning rental income are required to provide an information return (typically Form 1099–MISC) to the IRS and to the service provider. Exceptions to this reporting requirement are made for (i) individuals who rent their principal residence on a temporary basis, including members of the military or employees of the intelligence community (as defined in section 121(d)(9)), (ii) individuals who receive only minimal amounts of rental income, as determined by the Secretary in accordance with regulations, and (iii) individuals for whom the requirements would cause hardship, as determined by the Secretary in accordance with regulations.
861- This description is based upon the discussion at page 334 in S. Rep. No. 111–89, Final Committee Report of the Senate Finance Committee on ‘‘America’s Healthy Future Act of 2009,’’ published October 21, 2009.
-Return to Explanation of Provision
Back to Tax Tracker Codes Menu