Lungren seeks to repeal reporting requirement in health reform

Rep. Dan Lungren (R-Calif.) on Monday introduced legislation repealing the business reporting requirement in the new healthcare law. 

Starting in 2012, businesses purchasing more than $600 of goods or services from another business must provide detail of those transactions to the IRS. The new requirement is expected to capture lost revenue from companies that under-report on their tax returns and generated $17 billion over 10 years. Lungren argues it will create costly compliance headaches for store owners. 

"It is just one of the dumber things I have seen in Congress," he said, adding, "Imagine this: Goods and services purchased by a small business, from a supplier ranging from component parts of every American product, to phone and internet service, to the shipping service of Fed Ex or UPS, will now give rise to a new paperwork burden at tax time."

The congressman's proposal removes this requirement from the bill that President Obama enacted into law. 

Oddly, the IRS is awaiting directions from the Department of Health and Human Services about how to enforce the requirement. 

"They [the IRS] told us that HHS is the one that is given the requirement to interpret this entire law," Lungren said. "That was an extraordinary response as far as I was concerned ... I have never known HHS in the past to be responsible for interpreting tax law."

The legislation now awaits action by the tax-writing Ways and Means Committee.

The congressman would not say if his proposal hints at things to come as Republicans try to repeal the new healthcare law one section at a time.