Washington Watch - April 21, 2010


Washington Watch - April 21, 2010

Senate Examines Minority-Owned Businesses

United States Senators Mary L. Landrieu, D-La., Chair of the Senate Committee on Small Business and Entrepreneurship, and Ranking Member Olympia J. Snowe, R-Maine, recently held a hearing on the ability of minority-owned businesses to obtain capital. Officials from the Small Business Administration, as well as small-business owners spoke before the Committee.

In prepared testimony, Senator Landrieu commented on the struggle minority-owned businesses face by pointing out that they have a tough time obtaining capital, even when the economy is doing well. Ranking Member Snowe took a macro approach by mentioning how the recession has hurt minority groups most of all, noting that African-Americans and Hispanics face double-digit unemployment rates.

One witness present revealed his research, which found that minority entrepreneurs are met with additional barriers when finding and receiving capital. The study shows that minority entrepreneurs face a denial rate of 31.5 percent, as opposed to 12.3 percent for non-minority entrepreneurs. His study also suggests that lending discrimination plays a major role in the size of loans minority small business receive, with the median loan value $46,514 for minority-owned firms, compared to $108,912 for non-minority firms.

View the hearing here.

New Agency Created To Oversee Health Law

The Office of Consumer Information and Insurance Oversight has been created as part of the health reform effort to lead implementation on the law's objectives. Among the branches that the agency includes is an office to implement the exchange program in 2014, as well as a customer service office to answer consumer questions and concerns. The following offices, among others, will make up the Office of Consumer Information and Insurance Oversight:

  • Office of Insurance Programs - responsible for the high risk pool program and the early retiree reinsurance program
  • Office of Insurance Exchanges - develops and oversees the exchanges, grants individual states and the operations of the exchanges in 2014
  • Office of Consumer Support - keeper of the information on insurance pricing data, provider of consumer assistance, and state grants for assistance
  • Office of Oversight - implements, monitors and enforces new insurance rules, including medical loss ratios, performing rate reviews and issuing rate review grants to the states
  • Office of the Director - evaluates and leads the entire program

For information and FAQs on the new health law, visit .

IRS Commissioner Testifies Before House Committee

The House Committee on Small Business pressed IRS Commissioner Douglas Shulman to help entrepreneurs take advantage of new tax incentives. The Commissioner detailed outreach and education efforts designed to assist small business taxpayers.

“Helping entrepreneurs grow and create jobs has been a top priority for this Congress,” said Rep. Nydia M. Velázquez (D-NY), the Chairwoman of the House Committee on Small Business. “The IRS has an important role to play in ensuring entrepreneurs can tap into the Recovery Act and HIRE Act’s tax breaks, while also reducing the costs of complying with the tax code.”

Many small firms have complained that filing taxes requires filling out numerous, time-consuming forms. According to one study, small firms with less than $10 billion in revenues spent more than 1.7 billion hours on tax compliance, incurring out-of-pocket expenses of between $15 billion and $16 billion.

The NASE believes the complexity of the IRS tax code is particularly troublesome for the self-employed business owner and is a snare for unintentional noncompliance. We believe efforts to address the tax gap and compliance must focus on overall simplification, eliminating issues of inequity within the tax code, and enhancing taxpayer education and outreach. The majority of small business taxpayers want to comply with existing tax laws, thus making tax regulations easier to understand is the most effective and equitable way to improve compliance and to reduce the tax gap.

View video from the hearing here.

IRS Sends Out Health Credit Reminders

Starting this week, the IRS is notifying firms eligible for the tax credits available to small businesses who offer insurance. The postcards sent by the tax agency will help business owners figure out if they are eligible to take the credit and how much they might expect to receive.

Business owners who do not receive notification by mail may still be eligible to apply, says the IRS. For more information and eligibility criteria, visit the Small Business Health Care Tax Credit page on the IRS's Web site.

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Courtesy of NASE.org