On April 14, President Obama signed into law the Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act of 2011 (H.R. 4; 1099 Act), which repeals both the expanded Form 1099 information reporting requirements mandated by last year's health care legislation and also the 1099 reporting requirements imposed on taxpayers who receive rental income enacted as part of last year's Small Business Jobs Act (P.L. 111-240).

The new law eliminates reporting requirements for:

• Payments by a trade or business for property or services totaling $600 or more in a calendar year that are made to corporations other than tax-exempt entities. This requirement was enacted in the Patient Protection and Affordable Care Act of 2010 (PPACA) and was scheduled to become effective for payments made after December 31, 2011. It is repealed effective for payments made after December 31, 2011.

• Payments totaling $600 or more in a calendar year made to a service provider in connection with the receipt of rental income. This requirement was enacted in the Small Business Jobs Act of 2010 and became effective for payments made after December 31, 2010. It is repealed for payments made after December 31, 2010.

As a result of the repeal, the 1099 reporting rules continue unchanged: Namely, under Sec. 6041(a), "All persons engaged in a trade or business and making payment in the course of such trade or business to another person" of $600 or more must report the amount and the name and address of the recipient to the IRS and to the recipient. The Code applies this requirement to payments of "rent, salaries, wages, premiums, annuities, compensations, remunerations, emoluments, or other fixed or determinable gains, profits, and income," and the Treasury regulations add, "commissions, fees, and other forms of compensation for services rendered aggregating $600 or more" as well as interest (including original issue discount), royalties and pensions (Regs. Sec. 1.6041-1(a)(1)(i)).

If you have any questions, please feel free to contact your RKL tax advisor.