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Stories tagged with “1099 reporting requirement

Justice

Supreme Court Draws Fourth Amendment Line At Drug-Sniffing Dogs At Your Door

In the moments before the U.S. Supreme Court began its historic oral arguments in the challenge to California’s same-sex marriage ban, the court issued its decision in a case with very different but important constitutional implications.

In a 5-4 decision in which the justices split along unusual lines, the court led by Justice Antonin Scalia held that police sniffing around for drug activity cannot bring their drug dog to the front door of a private home without probable cause – usually a warrant. The case is the second in two years to affirm traditional property-based limits on government invasions of privacy, although in very different contexts.

In this case, detectives who received a tip that the defendant was growing marijuana in his home walked up to his front door with a drug dog by their side, and used the signals from the dog as the basis to obtain a search warrant and enter the suspect’s home. The crux of the justices’ disagreement comes down to whether Detective Bartlett’s chocolate labrador, Franky, was just another dog entitled to wander up to someone’s home, or whether his special olfactory skills and training made him more analogous to a pair of high-powered binoculars. Justice Elena Kagan explains in her concurrence:

As this Court discussed earlier this Term, drug-detection dogs are highly trained tools of law enforcement, geared to respond in distinctive ways to specific scents so as to convey clear and reliable information to their human partners.  They are to the poodle down the street as high-powered binoculars are to a piece of plain glass. Like the binoculars, a drug-detection dog is a specialized device for discovering objects not in plain view (or plain smell). And as in the hypothetical above, that device was aimed here at a home—the most private and inviolate (or so we expect) of all the places and things the Fourth Amendment protects. Was this activity a trespass? Yes, as the Court holds today. Was it also an invasion of privacy? Yes, that as well.

Not so, said the dissenters, led by Justice Samuel Alito. Alito reasons that a dog’s sniffing skills have been used for centuries, and that if there were really a distinction to be made concerning drug-sniffing dogs, that case would have come up already. The dissenters – three conservatives with Justice Breyer as an unusual ally – also reject the reasoning by the concurring Justices Kagan, Sotomayor and Ginsburg that analogizes the drug dog case to the landmark Kyllo decision, in which the court rejected the use of thermal imaging technology to monitor a home. That case was about new technology, they said, and this case is about old tactics.

But whether using new or old technology, the nature of the surveillance by police is relatively new. Drug dogs are among the many tools of the 40-year-old drug war, and in the latest expansion of their use, we are seeing them creep into public schools. Last year’s case invalidating warrantless GPS monitoring, decided on similar grounds, was also a case about drugs. And many of the millions of newly aggressive stop-and-frisks by the New York Police Department resulted in arrests for nothing more than possession of small amounts of marijuana. In taking a sober look back at the strategies law enforcers justified at the height of the drug war, the invasiveness of police implementation will be just as important as the tactics themselves in determining both whether they pass Fourth Amendment muster, and whether they are tailored to meet public safety goals.

Alyssa

‘Enlightened,’ Aaron Swartz And The Consequences Of Activism

At the end of the second season of Enlightened, HBO’s strange, precise show about Amy Jellicoe (Laura Dern), a former corporate drone who has an awakening and decides she has to bring her employer, Abaddon Industries to justice, Amy finds herself in shock after she is caught stealing corporate documents and turning them over to Jeff (Dermot Mulroney), a reporter for the Los Angeles Times. “They just fired me,” she tells him on the phone, clearly frightened despite her show of bravado to the company’s president. “They said they were going to sue me.” “Well,” said Jeff, who had been putting up some pretense of dating her to enhance their emotional bond while she continued to feed him documents, “we knew that was going to happen.” “We did?” Amy asked him. “Amy, this story is going to shift the paradigm, man,” Jeff tried to reassure her, appealing to her rather grandiose ego and desire to be an “agent of change” on a massive scale. “They can’t stop it, okay? It’s all worth it.” When Amy told him “We’ll see,” she sounded more sobered, and more realistic, than she has at any other point at the show, even at the moment of her biggest triumph.

Enlightened is a beautiful, wonderful, extraordinarily difficult show on any number of levels—I find it so hard to watch even though I think it’s remarkable that I marathoned the entire second season yesterday so I could enjoy and get it over with at once. And Mike White’s long and quietly been doing critically important work about how hard it is to live out your principals in America, whether he was writing about Dewey Finn (Jack Black) finding another way to make a career out of his love of music in School of Rock or showing Amy crumple in the first season as she learned that the salary for her dream job at a non-profit would leave her bobbing around the poverty line. But even though Enlightened had a semi-triumphant finale, it made one of the most painful points White’s ever gotten across: that you can be right on the merits, you can even win a major political or social battle, and still be treated like a pariah, fired, sued, or jailed. Winning doesn’t save you from consequences—in fact, your continued suffering may be the price of your victory.

This is a point that—with the exception of martyr stories like Dr. Martin Luther King Jr. and Malcolm X—is often significantly absent from our popular understanding of history and our mass culture. We remember Harriet Tubman’s heroic work as a conductor on the Underground Railroad and never bother to learn that she had her arm broken by a train conductor while white passengers called for her to be thrown off the train, that she didn’t receive a pension for her Civil War service until 1899, and that she was the victim of a kind of prototypical 419 confidence fraud. After Frank Kameny was fired from the U.S. Army Map Service after his arrest in Lafayette Park for cruising, he was never employed again, friends and family supported him as he pursued activism, and it wasn’t until 2009 that Office of Personnel Management Director John Berry apologized to Kameny on behalf of the government and gave him the Theodore Roosevelt Award.

Seeing the gap between the public impact of activism and the private consequences for activists unfold in Enlightened hit me in a particularly painful way because I watched the show’s second season on the same day that the New Yorker put Larissa MacFarquhar’s profile of Aaron Swartz, the activist and programmer who committed suicide in January, online, and the day after The Atlantic published Swartz’s former partner Quinn Norton’s account of her involvement in the federal case against him for downloading documents from JSTOR. I would never compare Swartz to Amy Jellicoe as activists on the whole, because Amy’s talents and understanding of political systems are so nascent, and because she fundamentally lacks the talent for making friends that Swartz, in my and many others’ experiences, possessed. But in that lack of full cognizance of the consequences of their actions, they seemed to have something in common. MacFarquhar writes:
Read more

Health

Senators Reintroduce Bill To Repeal Small Business Reporting Requirement From Health Law

As President Obama prepares to defend the Affordable Care Act in tonight’s State of the Union address, a bipartisan group of senators have reintroduced two separate bills to repeal a portion of the law. Both measures seek to eliminate a requirement that businesses fill out a 1099 tax form for purchases over $600:

- SEN. MIKE JOHANNS’ (R-NE) BILL 52 CO-SPONSORS, 12 DEMS: The bill would repeal the reporting requirement and would pay for the loss in revenue by directing Office of Management and Budget (OMB) to identify $39 billion in unspent and obligated accounts. In November, the bill failed 61 to 35, but 21 Democratic voted for the measure.

- SEN. MAX BAUCUS’ (D-MT) BILL CO-SPONSORED WITH REID: The bill would repeal the reporting requirement, without making up the $17 billion in lost revenues.

Both sides have played politics with the issue, although everyone — including Obama — agrees that the measure would present a serious paperwork burden to employers were it to go into effect in 2012. But at the end of last year, Republicans twice objected to attaching a repeal measure to the tax compromise and Democrats have failed to come up with an alternative way to pay for repeal.

Johanns’ measure has its problems, but it’s not clear what Democrats stand to gain by drawing out the debate — if they want to produce their own repeal alternative, then they best find some way to pay for it. One thing worth highlighting, however, is that Johanns is asking the OMB to identify $39 billion in savings while the revenue lost from eliminating the 1099 requirement is just $17 billion. He pays for it and then some.

The 1099 provision was originally designed to bolster the tax compliance of sole proprietors and pay for the coverage expansion in the law.

Health

Republicans Object Twice To Repealing 1099 Provision

Earlier today, Republicans twice objected to repealing the 1099 reporting requirement, which would require small businesses to report transactions of more than $600 to the IRS. Sen. Debbie Stabenow (D-MI) tried to attach the repeal provision to the just-passed tax compromise but Republicans — who have argued that the provision would burden small businesses — struck down the request. Separately, Sen. Max Baucus’ (D-MT) attempted to move the Senate to consider a repeal measure was also shot down after Republicans requested to replace his amendment with a Republican alternative offered by Sen. Mike Johanns (R-NE):

STABENOW: I would ask for another 10 seconds to offer a unanimous consent request in order to set aside the second degree amendment to the Reid McConnell substitute to offer an amendment number 4773 that would repeal the 1099 reporting requirement for small business.

KYL: I object.

Watch a compilation of the two objections:

Ultimately, this isn’t very surprising, since Republicans see the 1099 repeal issue as a good way to start the ball rolling on unwinding the health care law and a convenient way to frame their more general argument about the Affordable Care Act. The administration and Congressional Democrats have all condemned the provision as burdensome and overreaching and Republicans are hoping to extend that argument to the entire law. In this sense, the longer the 1099 remains an issue, the better.

What’s more, including the amendment in this tax compromise would could allow both parties to take credit for the measure. Should it pass individually — in the way that Sen. Mike Johanns (R-NE) has suggested — the party can wrap themselves in small business respectability and use it to build momentum to go after other provisions in the law.

The only substantive difference between the Johanns and Baucus amendments is that Johanns is paid for and Baucus isn’t. But given the fact that Republicans supported an overall tax agreement that would add some $850 billion to the deficit, their objection to the Baucus bill shouldn’t be taken too seriously. But even if we do, Johanns can simply do what Baucus tried — go to the Senate floor and attach his measure to the tax agreement. Asked why he’s not interested in doing so, a spokesperson for the Senator said Johanns respects the “framework” of the existing agreement.

Health

53 Senate Democrats Voted To Repeal 1099 Reporting Requirement From Health Law

Earlier today, in a vote of 73 to 25, the Senate approved a Food Safety Bill that would “expand the Food and Drug Administration’s authority over farms and food processors,” but ultimately failed to attach an amendment to repeal the 1099 reporting requirement in the Affordable Care Act. Lawmakers and small business lobbyists generally agree that the provision — which improves tax compliance by requiring small businesses to report any purchases over $600 to the IRS, and raises $19 billion to pay for the law — overburdens businesses with paperwork and proposed numerous amendments to repeal it. The question has always been how to pay for the $19 billion in lost revenue and last night, Sens. Mike Johanns (R-NE) and Max Baucus (D-MT) offered two solutions.

Both measures failed to garner the necessary 67 votes to be attached to the underlining legislation. The two amendments had the effect of splitting the vote for repeal, but a grand total of 53 Democrats still voted to eliminate the provision (voting for one bill or the other). Just five — Carper (D-DE), Dodd (D-CT), Durbin (D-IL), Harkin (D-IA) — voted to preserve the measure (against both measures). Sen. Pryor (D-AR) didn’t vote on the Johanns amendment, and then voted Nay on Baucus’ measure:

JOHANNS AMENDMENT: Repealed the 1099 provision and pays for the measure by directing Office of Management and Budget (OMB) to identify $39 billion in unspent and unobligated accounts. Failed 61 to 35. (21 Democratic voted for the measure. Bayh, Bingaman, Cantwell, Conrad, Feingold, Hagan, Klobuchar, Kohl, Lincoln, Manchin, McCaskill, Menendez, Nelson (FL), Nelson (NE), Stabenow, Tester, Udall (CO), Udall (NM), Warner, Webb all voted in favor the measure)

BAUCUS AMENDMENT: Repealed the 1099 provision without paying for it. Failed 44 to 53. (14 Democrats voted against the measure: Bennet (CO), Bingaman, Carper, Conrad, Dodd, Durbin, Feingold, Harkin, Kohl, Lincoln, McCaskill, Nelson (FL), Udall (CO), Udall (NM) voted against the measure.)

The 1099 measures may have failed — as some Democrats objected to delegating the task of finding cuts to an agency within the executive branch — but the high vote count on the Johanns amendment suggests that the measure could pass under normal rules if it is re-introduced in the new Senate. Johanns spokesperson Natalie Krings tells me that the Senator “was pleased to see 21 of his Democrat colleagues support the amendment” and that he “intends to work with Senator Baucus on repealing the measure.” “As long as the offset is not a tax increase, he is all ears,” she added. “We’ll keep pushing and it is our hope that tonight’s show of support for job creators is another step toward scored obvious needed end result – full repeal.” It’s still unclear, however, if the CBO socred the pay-for as a savings.

The underlining bill would “allow the FDA to set new standards for farms, require processors to have hazard-control plans for preventing contamination of foods, and increase inspections of producers.” The FDA will be able to recall food it suspects is tainted, access to internal records at farms and food production facilities and “set safety standards for imported foods, requiring importers to verify that products grown and processed overseas meet safety standards.” A more robust version passed the House in 2009 and “House leaders have indicated that the House would accept the Senate version, avoiding the need to reconcile the bills.”

Health

Johanns’ New 1099 Pay-Fors Prove How Hard Repealing The Health Law Really Is

In August, Sen. Mike Johanns (R-NE) introduced a measure to repeal the 1099 reporting requirement in the Affordable Care Act — which requires small businesses to report any purchases over $600 to the IRS — and proposed paying for the $19 billion shortfall by eliminating $11 million from the Preventive Health Task Force and weakening the individual health insurance mandate. The amendment attracted seven Democratic Senators but did not receive the necessary 60 votes to move forward. Now, as the Senate prepares to re-consider repeal on November 29th, Johanns has introduced a different set of pay-fors that he hopes will attract additional Democratic support:

“My latest effort to repeal this costly mandate should easily win the support of my colleagues,” said Johanns. [...]

Johanns’ amendment directs the Office of Management and Budget (OMB) to identify $39 billion in unspent and unobligated accounts to replace the revenue that might have been generated by the 1099 paperwork mandate. This represents only about five percent of the total funds in unspent and unobligated accounts and gives the Administration discretion to ensure these funds do not affect ongoing and necessary programs.

A spokesperson at Johanns’ office told me that the Senator is only interested in repealing the reporting mandate and is no longer interested in making waves with controversial pay-fors that take away money from the mandate or prevention. Since President Obama, Senate Finance Committee Chairman Max Baucus (D-MT), and House Speaker Nancy Pelosi (D-CA) have all come out in support of stripping the provision, Johanns sees renewed momentum on the issue and hopes to build a coalition around removing the 1099 requirement.

But it’s unclear if this pay-for will be any less controversial. First, if Senators are hesitant to vote for specific cuts because they may target their favorite programs, they would also be hesitant to delegate the task of finding cuts to another agency — out of fear that it would target their favorite programs.

Meanwhile, CAP’s Michel Linden doesn’t think that the pay-for would score as deficit neutral. “Unspent and Unobligated balances are not real money sitting in some account, they are actually ‘budget authority’ – the ability for an agency to draw down funds from the treasury to turn into actual outlays,” he told me. “While canceling unobligated balances might save a little bit, I’m pretty sure the vast majority just goes away if its not used which means that canceling it won’t save any money.”

He makes the following analogy:

A parent says to their teenager, “You can spend up to $100 on school supplies this year.” The child then spends only $80. Now if the parent has promised the child that they get to keep the difference, then canceling that promise would actually save money for the family. But if the parent hasn’t made that promise – if instead the understanding is that the teenager can spend up to $100 but if he or she comes in low, then any change is expected to be returned to Mom and Dad – then “taking back” that other $20 has no real meaning for the family’s bottom line.

The very fact that Johanns feels the only way he can repeal the 1099 is if he farms out the task of identifying pay-fors to a separate agency, however, only reiterates the difficulty of actually going through with the GOP pledge of eliminating the entire law or even going provision by provision.

Baucus — who has introduced his own 1099 repeal bill — has yet to identify any pay-fors. His office has not returned my inquiries into this matter.

Health

Baucus Backs Effort To Repeal ACA’s 1099 Provision, But Will Congress Agree On The Pay-Fors?

Senate Finance Committee Chairman Max Baucus (D-MT) has announced that he will introduce legislation to repeal the 1099 reporting requirement in the Affordable Care Act. The provision, which requires small businesses to report any purchases over $600, was intended to increase the tax compliance of sole proprietors, but has been condemned as overly burdensome by a bipartisan group of lawmakers — including President Obama, House Speaker Nancy Pelosi — and small business advocacy organizations like the National Federation of Independent Businesses (NFIB). The Congressional Budget Office (CBO) estimates that the requirement would generate $17 billion in revenue over 10 years.

“The proposal was originally written to keep taxes low by giving the IRS more tools to ensure all owed taxes were paid,” Baucus’ press release reads. “However, following passage of the law, some business owners expressed concern that when the provision does go into effect, the forms would place too large of a paperwork burden on businesses struggling in a still-recovering economy.” In response to those concerns, Baucus said he would “repeal the new reporting requirements and look for other ways to improve tax compliance and keep taxes low.”

Two previous efforts to repeal the measure failed in the Senate. Sen. Mike Johanns’ (R-NE) proposal would have repealed the tax reporting requirement for small businesses, but made up for the $17 billion revenue shortfall by eliminating $11 million from the Preventive Health Task Force and weakening the individual health insurance mandate. Sen. Bill Nelson’s (D-FL) alternative proposal would have required only larger businesses to report their transactions with vendors. Baucus’ office did not specify how the Senator would pay for the repeal or return requests for comment.

NFIB President Dan Danner praised Baucus’ announcement just minutes after it became public. “We are pleased Senator Baucus has announced his support for full repeal of the 1099 provision and are eager for him to formally introduce his bill when Congress returns,” Danner said in a statement. “The sooner Congress repeals this burdensome provision, the better.” Asked about the organization’s quick response, NFIB spokesperson Stephanie Cathcart told me the group has worked closely lawmakers on both sides of the aisle to build momentum to repeal the provision. She said NFIB did not help craft the Baucus’ particular repeal provision.

For repeal to succeed, Senators would have to waive the pay-go rules or find $17 billion in savings — a tall order given today’s partisan environment. Democratic have previously proposed paying for repeal with unspent stimulus funds (a bad idea), changing the inheritance tax (which is likely to get some GOP support) or levying a tax on carried interest.

Health

Democrats And Republicans Find Common Ground On ‘Tweaking’ Health Reform’s 1099 Provision

In the day since Democrats lost their majority in the House and suffered several setbacks in the Senate, President Obama and Majority Leader Harry Reid (D-NV) have suggested that they would be open to “tweaking” or revisiting parts of the Affordable Care Act. Republican leaders continue to advocate for complete repeal of the law, promising to replace it with “common sense” proposals from their Pledge To America.

This evening, during an interview on ABC News, House Speaker Nancy Pelosi (D-CA) reiterated that Democrats would work to preserve the core of the law, but said that they could willing to compromise with Republicans on the so-called 1099 reporting requirement. Members of both parties have argued that this portion of the law — which was designed to bolster the tax compliance of sole proprietors and pay for coverage expansion — is overly burdensome to small business. Obama specifically mentioned the provision during his press conference today and Pelosi echoed his comments tonight [Note this is an extended version of the transcript]:

PELOSI: So, I– I don’t– I don’t– think they’re going to take health care apart. There are certain parts of it that we all may want to review– one way or another. Put it out there. But the fundamentals of it, you know, when we have our patients’ bill of rights about– no preexisting conditions, and those provisions, they are– they cannot be there unless you have this basic structure of health care reform.

So, when we have this debate piece by piece, I think the American people will see how they like pieces of it, and how they relate to each other. And that some of that– you know, at 1099, it was a center provision. We didn’t like it in the House. The President mentioned it today. We’ve already passed on the floor– the repeal of 1099 in the House of Representatives. So, you know, there are certain pieces of it that should– always be subjected to review.

In September, senators from both parties proposed legislation to amend the provision, but neither version garnered 60 votes.

Sen. Mike Johanns’ (R-NE) amendment would have repealed the tax reporting requirement for small businesses, but made up for the revenue shortfall by eliminating $11 million from the Preventive Health Task Force and weakening the individual health insurance mandate. Sen. Bill Nelson’s (D-FL) alternative proposal would have required only larger businesses to report their transactions with vendors. Since then, Democrats have offered numerous other legislative compromises.

Update

Senate Minority Leader Mitch McConnell (R-KY) stressed that Republicans also opposed the reporting requirement. “The first goal is repeal it and replace [the health law],” McConnell told Fox News’ Bret Baier. “If we have the votes to put it on his desk we’re going to do that. if we can’t get it to his desk or if we do and he vetoes it, we’ll go back and try to go after it piece by piece. The extraordinary unpopular individual mandate, the 1099 requirement. “

Health

Obama Opens The Door To ‘Tweaking’ The Affordable Care Act

President Obama opened the door to tweaking parts of the Affordable Care Act during his press conference about the midterm elections, specifically endorsing proposals to modify a provision to to increase the tax compliance of sole proprietors. The so-called 1099 provision, which requires small businesses to report payments they’ve made to corporations for goods, has been condemned as overly burdensome by small business lobbyists and a bipartisan group of lawmakers.

Obama insisted that the American people did not want to re-litigate the health care reform debate or repeal some of the more popular consumer protections, but said that “if the Republicans have ideas for how to improve our health care system, if they want to suggest modifications that would deliver faster and more effective reform…I’m happy to consider some of those ideas.” Then, he turned to the 1099 provision:

OBAMA: I know one of the things that has come up is that the 1099 provision in the health-care bill appears to be too burdensome for small businesses. It just involves too much paperwork, too much filing. It’s probably counterproductive. It was designed to make sure that revenue was raised to help pay for some of the other provisions, but if it ends up being so much trouble that small businesses find it difficult to manage, that’s something we should take a look at. So there will be examples where I think, you know, we can tweak and make improvements on the progress that we’ve made. That’s true for any significant piece of legislation.

Watch it:

HHS Secretary Kathleen Sebelius and Treasury Secretary Tim Geithner have endorsed the change, but this is the first time Obama has publicly opened the door to amending parts of the law. He did stress that he would not support revisiting the more popular elements of the law, like closing the doughnut hole and preventing insurers from denying coverage based on pre-existing conditions. Asked about exit polls that showed that “one out of two of voters apparently said that they would like you to see it overturned or repealed,” Obama said, “it also means one out of two voters think it is the right thing to do.”

In September, Republicans and Democrats proposed dueling legislation to amend the provision, but both bills failed after the Senate failed to agree on how to pay for the changes.

Sen. Mike Johanns’ (R-NE) amendment would have repealed the tax reporting requirement for small businesses, but made up for the revenue shortfall by eliminating $11 million from the Preventive Health Task Force and weakening the individual health insurance mandate. Sen. Bill Nelson’s (D-FL) alternative proposal would have required only larger businesses to report their transactions with vendors.

Earlier today, Senate Majority Leader Harry Reid (D-NV) also conceded, “If there is some tweaking we need to do on the health care bill, I’m ready for some tweaking.”

Health

1099 Issue Moves Forward: Democrats Introducing New Offsets

Since the last two attempts to fix the 1099 provision in the health law failed, Democrats are planning to introduce several measures that would repeal the entire reporting requirement — despite the broad agreement that sole proprietors are not paying their fair share of taxes. The crux of the argument is how to offset the estimated $17 billion that the extra reporting was estimated to have brought it.

Democrats have introduced several options:

- SEN. MARK BEGICH’s (D-AK) AMENDMENT: Repeal entire reporting requirement and makes up for the revenue (approximately $17 billion) by using unspent stimulus funds. But as Pat Garofalo explains, there are about $280 billion in stimulus spending that haven’t been paid out. “But much of the money has already been allocated, including $65 billion in funding for tax breaks, which are intentionally going out the door a little bit at a time.” Therefore, “canceling unspent stimulus funds would mean increasing taxes on the middle class.”

- HOUSE DEMS: Measures would repeal the reporting requirement and make up for the shortfall by “changing the inheritance tax (which is likely to get some GOP support) or a tax on carried interest (which is likely to be opposed by nearly all Republicans and some moderate Dems).” Garofalo is actually really excited about that latter offset.

- GOP RECALL PETITION: Rep. Dan Lungren (R-CA) is circulating a discharge petition to force a vote on his amendment to repeal the 1099 provision. The petition has 93 signatures.

POLITICO’s Pule suggests that these early difficulties in identifying adequate offsets bode poorly for the GOP’s repeal effort. If they want to repeal the entire health care law, Republicans would have to make up for the billions of dollars in deficit reductions; agreeing on set of uniform pay fors will prove challenging. In fact, beyond the deficit problem, repealing the health care law will also create problems in the Medicare program and continue the upward trajectory of health care spending (the health care law begins to bend the health care cost surve beginning in 2015). Expect all of this to cause major headaches for conservatives as their base holds them to their repeal pledge and watch as they turn to defunding the measure instead.

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