Vastly Unpopular 1099 Requirement Survives Thanks to the Reliable Dysfunction of the U.S. Senate

Posted on by Caleb Newquist

Everyone’s favorite Two Minutes’ Hate from the healthcare reform legislation – the 1099 reporting requirement – managed to live to fight another day despite being as unpopular as the Democrats who originally got behind it (although don’t look at Nancy Pelosi).


As is the wont of Senate, this sliver of bipartisanship was foiled by…wait for it…politics:

The provision survived because of the complex politics of the Senate. Some lawmakers were reluctant to back repeal on Monday since the rule change would have been added to a popular food-safety law that is nearing approval, potentially jeopardizing its passage. In addition, dueling Democratic and Republican proposals allowed lawmakers to register their disapproval of the 1099 requirement whether the repeal passed or not.

In other words, everyone agrees that they hate this thing but they hate it in different ways. You see, it’s not enough to be against the 1099 requirement, it matters who gets the credit for being against so much that they actual introduced the proposal to do away with it.

Sigh. But it’s cool, the rule doesn’t actually go into effect until 2012, so blowing it off for another 12 months is totally an option. And a pretty realistic one, too.

Senators Cannot Agree on Fix to the Health Law [NYT via CPA Success]

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WFT’s Material Weaknesses Led to Giant Tax WTF

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The Company’s Annual Report on Form 10-K (the “Form 10-K”) for the year ended December 31, 2010 cannot be filed within the prescribed time period because the Company has identified a material weakness in internal controls over financial reporting for income taxes and requires additional time to perform additional testing on, and reconciliation, of the tax accounts to be included in the annual financial statements to be presented in the Form 10-K. The Company expects to file the Form 10-K on or before the 15th calendar day following the prescribed due date.


FuelFix has the gory details:

Oil field services firm Weatherford International goes by the stock ticker is WFT, but analyst reaction to the company reporting more than $500 million in tax errors is more likely drawing the reaction of “WTF?” from investors.

The company said it will have to restate its earnings going back to 2007 due to “material weaknesses” in its internal controls, namely:

1. inadequate staffing and technical expertise within the company related to taxes,
2. ineffective review and approval practices relating to taxes,
3. inadequate processes to effectively reconcile income tax accounts and
4. inadequate controls over the preparation of quarterly tax provisions.

So in other words, Weatherford has no tax experts in their accounting department, no one to supervise or review the work of those experts and no checks or balances over the tax provision process as a whole. Was the Ernst & Young audit team aware of this? Last year’s 10-K had a clean opinion, in case you were wondering. Oh, and Weatherford moved its HQ to Switzerland back in ’08. So there’s that.

Oops: Weatherford reports $500M tax error [FuelFix]

Warren Buffett Would Like to Clarify His Feelings on The Buffett Rule

“It isn’t [my idea] to have the rich pay more taxes. It’s to have the ultra-rich pay more,” he said on Bloomberg Television Friday. “It isn’t to have the rich pay more taxes. It’s to have the ultra-rich who are paying very low tax rates pay more taxes. There’s all kinds of ultra-rich who pay normal taxes, but there is a small segment–but you can find them very easily–who pay very low taxes, including me. People who make money with money only pay very low taxes at very high levels of income. … What I’m talking about would probably apply to 50,000 people out of 310 million in the country. [BBR/The Hill]