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On Friday July 2, 2010, the Internal Revenue Service published Notice 2010-51 inviting public comments on the guidance to be provided regarding the expanded information reporting requirements established under Section 9006 of the Patient Protection and Affordable Care Act of 2010 (“PPACA”). Under Internal Revenue Code Section 6041 (as amended by PPACA), informational reporting through the issuance of Form 1099-MISC, Miscellaneous Income, will be expanded to encompass payments of “gross proceeds” and “amounts in consideration for property.” In addition, Form 1099-MISC informational reporting will also extend payments to corporations, other than certain tax-exempt corporations. Previously, payments to corporations were exempt from Form 1099-MISC reporting requirements.

Notice 2010-51 does not contain guidance regarding the implementation of these expanded informational reporting requirements. Rather, Notice 2010-51 seeks comments regarding possible approaches the IRS should adopt with regard to future guidance to minimize the burden of the expanded reporting requirements and to avoid duplicate reporting.

In particular, the IRS seeks comments regarding:

1. The appropriate scope of the terms “gross proceeds” and “amounts in consideration for property” and how to interpret these terms to minimize reporting burdens and duplication.
2. Whether expanded reporting requirements should apply to payments between affiliated or related corporations.
3. Whether changes to the timing and manner of existing Form 1099 reporting are needed to minimize the compliance burden of the new reporting requirements.
4. Whether changes are needed to the rules for soliciting taxpayer identification numbers, including changes to Form W-9, Request for Taxpayer Identification Number and Certification.
5. Backup withholding and reporting requirements for missing Taxpayer Identification Numbers in light of the expanded reporting requirements.

The public comment period extends through September 29, 2010. Please contact John W. Boyd ( or 216.861.7910) or any member of Baker Hostetler’s Health Care Reform Team with questions.

Resources:

• IRS Notice 2010-51

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