If a little-known provision in the new federal health care bill goes into effect, a local coin dealer said he likely would close his business.

Tom Schell, owner of Security Rare Coins on Lititz Pike for 31 years, said a new IRS reporting requirement might mean filing 4,000 more forms a year and hiring an employee to keep up.

"I probably would just get out of it if it actually came to that," he said.

Aimed at catching businesses underreporting income, the expanded Form 1099 reporting requirements — contained in the health care bill — would place a paperwork burden on all small businesses, two local accountants said.

The provision, set to take effect in 2012, requires businesses to fill out a form for purchases of goods that total more than $600 in a year.

The change could mean tracking purchase totals throughout the year from hundreds of vendors, Reinsel Kuntz Lesher CPA Eric Wenger said.Though the change would affect all businesses, smaller businesses less equipped to deal with new paperwork demands would be hit hardest, he said.

"It's a paperwork nightmare," Wenger said.

"I just cannot see the overall benefit of this," Simon & Lever CPA Dennis Weidman said.

For coin dealers, the change would mean filling out forms for every customer coming in to sell gold and collecting their personal information to track all purchases in a year.

Schell said some coin dealers could have as many as 20,000 additional forms to fill out each year.

He said another concern is the viability of collecting Social Security numbers and other information from customers.

"Do you really want to give me all your personal information to sell something for $20?" he said. Owner Mark Kaufman at Susquehanna Coin Shoppe said he wouldn't close his business, but would need at least one additional employee.

"If you need a job in 2011, I'll be hiring," he said.

The provision was proposed as a way to help pay for the health care bill by raising about $17 billion over 10 years, Wenger said.

Rather than a new tax, it aims at bridging the so-called "tax gap" created by businesses that aren't paying all they should be.

But the provision hurts businesses that are "squeaky clean," Wenger said.

"It's like the elementary school thing," he said. "I don't know who to punish so you're all going to stay in for recess."

"I just think that the cost of compliance will not justify the amount of additional revenue that they'll collect," Weidman said.

A repeal or change of the requirement has gained bipartisan support in the House and Senate after Republicans proposed bills to drop the requirement in the months after health care passed.

Before breaking for recess in the House, Democrats proposed a bill that included a repeal of the legislation. It was voted down. Republicans opposed it because they said the bill would have made up for lost federal income with new taxes.

Lancaster County's representative, Joe Pitts, a Republican, said he objected to provisions that would also be an "extreme burden" on businesses, press secretary Andrew Wimer said.

Democratic representative and Pennsylvania Senate candidate Joe Sestak, who voted for the health care overhaul, joined many Democrats in voting for the repeal.

Sestak's press secretary Jonathon Dworkin said Sestak has said since he voted for health care that it is "a significant step ... but it wasn't perfect.

"He continues to work hard, like in this case, to make the changes needed to have an even better bill that is implemented as effectively as possible, and this was one of them," Dworkin said in an e-mail.

Senators are set to consider Republican and Democratic amendments to the small business legislation to drop or change the new 1099 reporting in September when they return from recess.

While Congress debates a repeal, Wenger said he expects some form of the change to become law, though there's still time before 2012.

Schell said he hopes for a full repeal.

"My opinion is this will eventually get repealed before 2012, but it would be a terrible amount of paperwork," he said.

jlebersole@lnpnews.com