By Jay Heflin; The Hill

The Small Business and Entrepreneurship Council has called on its members to contact their senators and urge them to repeal the mandate requiring small businesses to file 1099 forms to the IRS for purchases over $600.

"This new paperwork burden will be a nightmare for small business owners," the group's communication states. "Small business owners know what the impact of this mandate will be -- like crushing costs, and more time and effort devoted to paperwork and compliance efforts rather than expanding business opportunities and growing revenues."

However, efforts to repeal the mandate have derailed after the Senate last night failed to reach an agreement on how to proceed with the small business jobs bill. Sen. Mike Johanns (R-Neb.) sought to amend the proposal with a measure repealing the mandate that is a part of the new healthcare law.

House Small Business Committee ranking member Sam Graves (R-Mo.) is also looking to repeal the mandate.

Last month, Graves sent a letter to IRS Commissioner Douglas Shulman expressing strong concerns about how the mandate might negatively affect businesses and requested information on how the agency plans to help employers comply with the law. Shulman has yet to comply with that request.