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Washington Watch - February 1, 2012

Wednesday, February 01, 2012

Two Bills To Support Self-Employed Introduced In Congress

Two bills introduced by Rep. Aaron Schock, including one today, are targeted at supporting the self-employed and small-business owners and leveling the tax playing field.

H.R. 2592, Charitable Contribution Parity and Enhancement Act, introduced in August by Representatives Schock (R-Ill.) and Schilling (R-Ill.) would allow small businesses (C corporations are not eligible) to receive the same tax deduction given to larger corporation for the donation of extra inventory to charity and nonprofits.

Considering that the self-employed and small businesses (499 or less employees) make up 99% of the U.S. business economy, it is yet another glaring example of continued disadvantages faced by the self-employed and small-business owners. We applaud Representatives Schock and Schilling in their efforts. Full text of the legislation can be found here

Today, Representative Schock will introduce legislation that would repeal the 1099-K reporting requirement included in the Affordable Health Care Act. Starting next year, the IRS would be required to collect the 1099-K form from credit card companies and other third party entities as a mechanism for tracking credit transactions. The paperwork impact on the self-employed and small businesses would be enormous and result in a potential negative audit environment.  

Companion legislation in the Senate is expected to be introduced by Senator Thune (R-S.D.) next week. Text of the legislation has not been made available.


National Taxpayer Advocate Calls For Tax Bill Of Rights

In the past the NASE has supported a number of National Taxpayer Advocate Nina Olson's claims, most noteably, the fact that many in the self-employed community are unfairly targeted in terms of tax gap collection efforts. In her recent report to Congress, National Taxpayer Advocate Nina Olson urges Congress to formalize a Taxpayer Bill of Rights that would clearly list the major rights and responsibilities of taxpayers.

The report recommends that Congress organize taxpayer rights under the following ten broad principles: (1) right to be informed; (2) right to be assisted; (3) right to be heard; (4) right to pay no more than the correct amount of tax; (5) right of appeal; (6) right to certainty; (7) right to privacy; (8) right to confidentiality; (9) right to representation; and (10) right to a fair and just tax system.

To help taxpayers understand what the law requires of them, the report further recommends that Congress organize taxpayer responsibilities under the following five principles: (1) obligation to be honest; (2) obligation to be cooperative; (3) obligation to provide accurate information and documents on time; (4) obligation to keep records; and (5) obligation to pay taxes on time.

The report summarizes recommendations the Advocate has made in past reports to create additional taxpayer rights and recommends that those rights be incorporated into Taxpayer Bill of Rights legislation. “It has been 13½ years since we have had major taxpayer rights legislation,” Olson wrote. “Our laws have not kept pace with our notions of procedural fairness in 21st century tax administration, particularly given our tax system’s expanded and diverse taxpayer base and duties.”

Have questions on your taxes? NASE members can turn to the our tax professionals all year round for their concerns. 


New State Small Biz Numbers

The economic condition of small businesses in the United States is captured in the latest edition of the Small Business Profiles for the States and Territories. This annual publication from the Office of Advocacy provides information on the demographics of business ownership, employment, industry composition, and small business income, for each of the 50 states and the District of Columbia. The publication provides available limited data on the U.S. territories.

Click here for detailed state-by-state breakdowns. 


Washington Watch Online

Visit NASE Advocacy to view archived editions of Washington Watch. While you’re there, read the latest updates from the Washington, D.C. office, write your Congressperson, and find out how you can join the fight for micro-business.