Thankfully this is true! The 2010 healthcare legislation and the Small Business and Jobs Act of 2010 included two new sets of rules. Together, these rules added significantly to the paperwork burdens of business owners (and their accountants!)
The attempted 1099 changes were finally quashed by the Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act of 2011 (try saying that 10 times!) This is outstanding news for businesses and rental property owners.