The paperwork the 1099 provision in the health care reform law will generate for small businesses could outweigh the tax benefits from the measure, the Internal Revenue Service Taxpayer Advocate Service said in a report to Congress. The law requires businesses to report all payments to vendors for more than $600. The IRS watchdog "is concerned that the new reporting burden, particularly as it falls on small businesses, may turn out to be disproportionate as compared with any resulting improvement in tax compliance," the report said.

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