Congress raises disaster-contractor reporting threshold, reducing IRS oversight
H.R. 1093 — Natural Disaster Property Protection Act of 2025 · Filed by Brittany Pettersen (D-CO) · 1 cosponsor · Introduced Feb 6, 2025 · Referred to committee
Your members of Congress
Enter a ZIP to see where your representative and both senators stood on this bill.
Looked up on this device — your ZIP is never stored on our servers.
What it does
This bill raises the threshold at which businesses must report payments for natural disaster mitigation and repair work to the IRS from $600 to $5,000. Currently, any payment of $600 or more for services or goods triggers a Form 1099 reporting requirement; this bill exempts payments under $5,000 for qualified disaster-related expenses from that reporting obligation.
Why we flagged it
The bill's operative mechanism is a narrow exemption from IRS reporting requirements for a specific category of business payments. It is not a tax cut (no rate or liability change), but a reduction in administrative reporting burden for disaster-related transactions.
What the text implies
- Raises the reporting threshold only for disaster-related expenses, creating a category-specific carve-out that may incentivize misclassification of ordinary contractor payments as disaster-related to avoid reporting.
- Reduces IRS audit trail for a sector (disaster recovery) historically vulnerable to fraud, price-gouging, and inflated invoicing following major weather events.
The full analysis lists 4 implications of this text.
Who stands to gain
disaster recovery contractors; construction and remediation firms; property owners with disaster-recovery expenses