More On Legal & Compliancefrom The Advisor's Professional Library
- Updating Form ADV and Form U4 When it comes to disclosure on Form ADV, RIAs should assume information would be material to investors. When in doubt, RIAs should disclose information rather than arguing later with securities regulators that it was not material.
- U.S. Securities and Exchange Commission Information This information sheet contains general information about certain provisions of the Investment Advisers Act of 1940 and selected rules under the Advisers Act. It also provides information about the resources available from the SEC to help advisors understand and comply with these laws and rules.
The Senate on Nov. 29 failed to approve legislation that would have repealed the expanded Form 1099 reporting requirements for small businesses that’s set to take effect in 2012.
As the Financial Services Institute (FSI) noted in a recent alert to its members, the Senate failed to pass both amendments to the Patient Protection and Affordable Care Act (PPACA) “that would have repealed the requirement for financial advisors, and other businesses, to provide a Form 1099 to vendors and the IRS for purchases of $600 or more.” FSI says that it believes this will be the last vote on the 1099 issue this year, which leaves “only one calendar year before the new 1099 reporting goes into effect.”
FSI says that it will continue to work for repeal of the Form 1099 requirements because it imposes an “extremely burdensome information reporting requirement on small businesses, including independent financial advisors”; and that the burden of the reporting requirement cannot be justified by the limited utility that the Form 1099 will provide the government.
Sen. Mary Landrieu, D-La., chair of the Senate Committee on Small Business and Entrepreneurship, introduced legislation in mid-November to repeal the expanded Form 1099 reporting requirement for small businesses.
The bipartisan group of co-sponsors to Landrieu’s bill included Senate Finance Committee Chairman Max Baucus, D-Mont., and Sens. Mark Begich, D-Ala.; Debbie Stabenow, D-Mich.; Jeanne Shaheen, D-N.H.; and Scott Brown, R-Mass. Baucus announced on Nov. 12 his intention to seek repeal of the expanded Form 1099 income reporting requirement, which requires small businesses to report payments made for goods and services.
In testimony before the Small Business Committee’s Nov. 18 hearing on the regulatory and administrative burdens on America’s small businesses, Larry Nannis, Chairman of the National Small Business Association (NSBA), said that small business owners “face an overwhelming regulatory burden in complying with Internal Revenue Service (IRS) regulations.”Unlike large corporations, he said, small businesses “are an easy target,” as they lack the “hordes of accountants, benefits coordinators, attorneys, and personnel administrators” to help them keep pace with “the overwhelming regulatory and paperwork demands of the federal government.”