Efforts to repeal the expansion of a tax reporting requirement that's expected to create a paperwork nightmare for businesses have again fallen flat.

Two amendments that would have repealed a controversial reporting requirement that's expected to affect as many as 40 million businesses failed to get the required votes in the Senate. The votes this week follow failed votes on similar measures in September.

Companies currently report amounts over $600 spent in a year on services with any one unincorporated businesses-usually independent contractors and sole proprietors-on Form 1099s sent to those individuals, but money spent with other corporations, or for the purchase of goods or property, isn't required to be reported on a 1099. Unless Congress acts, however, that distinction will be scrapped in 2012 when Section 9006 of the Patient Protection and Affordable Care Act takes effect.

The information reporting requirement, which was tucked into the healthcare law passed earlier this year, would essentially require businesses to track all spending-on independent contractors, property purchases, office supplies, electricity, and more-and send Form 1099s to all of those providers.

The measure was intended to help pay for healthcare reform. The fight over its repeal has largely been about how to make up for that money. The Joint Committee on Taxation estimates that eliminating the new requirement would result in revenue loss of about $19 billion from 2012 to 2020, according to a Government Accountability Office report.

The Senate votes on Nov. 29 came in connection with a vote on a food safety bill. An amendment offered by Sen. Mike Johanns (R-Neb.) fell shy of the 67 votes needed, in a 61 - 35 vote. That measure would've paid for the repeal using funds from "unspent and unobligated" federal accounts. The offset would've represented about 5 percent of the total funds in unspent and unobligated accounts, according to Johanns. The other amendment offered by Senate Finance Committee Chairman Max Baucus (D-Mont.) , which would've repealed Section 9006 with no offset, was defeated in a 44 - 53 vote. Baucus said the Johann amendment "goes too far" and would "hand over a blank check to the OMB Director to slash $39 billion wherever he wants."

The 1099 provision has drawn harsh criticism from groups including the U.S. Chamber of Commerce, the National Federation of Independent Business, American Institute of Certified Public Accountants, and the U.S. Small Business Administration, which contend that it will be too burdensome, particularly for small businesses. The International Revenue Service's National Taxpayer Advocate, Nina Olson, has said in a report to Congress that the new reporting burden "may turn out to be disproportionate as compared with any resulting improvement in tax compliance."

Meanwhile, the Treasury Department and the Internal Revenue Service have proposed exempting payment card transactions, which are already reportable under another section of the Internal Revenue Code, from the information reporting requirement.

Section 9006 is slated to take effect for payments made after Dec. 31, 2011, so businesses will need to start recordkeeping in 2012 and report all those payments on tax returns filed in 2013. The IRS must still write the implementing regulations.