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September 29, 2010
Mr. Douglas Shulman
Commissioner
CC:PA:LPD:PR(Notice 2010-51), Room 5203
Internal Revenue Service
P.O. Box 7604, Ben Franklin Station
Washington, DC 20044
RE: Notice 2010-51
Dear Commissioner:
The Government Finance Officers Association (GFOA) would like to express its concern with the new reporting requirements set forth in Section 6041 of the Internal Revenue Code (IRC), which was amended by Section 9006 of the Patient Protection and Affordable Care Act of 2010, and urge the Internal Revenue Service (IRS) to proceed cautiously in its efforts to promulgate guidance to comply with this new requirement.
The GFOA, which represents 17,000 finance officers from states and local governments around the country, would like to make the IRS aware about the costs that are likely to be incurred as states and localities attempt to comply with guidance implementing this new reporting mandate. While the GFOA supports the IRS’s efforts to implement changes to Section 6041 in a way that would minimize burdens and avoid duplicative reporting, our members remain concerned with the allocation of scarce governmental resources to administrative burdens, such as onerous data collection and other reporting requirements, that will need to be undertaken to track each and every purchase by both vendor and payment method.
Moreover, as the GFOA expressed when commenting on regulations addressing withholding under IRC Section 3402(t), several states and localities have explained that their current systems are ill equipped to handle any increase in the volume of 1099’s that would be required for additional vendor reporting. Our members further noted that they do not have the resources that would be needed to make upgrades to their existing systems to help ensure successful compliance. Lastly, and as expressed by the IRS in its notice for public comment, our members are concerned that duplicative and/or conflicting reporting might occur under Section 6041 and Section 3402(t) of the IRC, and would encourage the agency to consider ways to minimize such inefficiencies and the ensuing burdens they would create.
As the IRS moves forward with implementing its regulatory responsibilities, the GFOA hopes to have the opportunity to provide comments and offer testimony on any proposed rules that may be issued.
Sincerely,
Susan Gaffney
Director, GFOA Federal Liaison Center
202-393-8020
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