PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

Statement for the Record: Ways and Means “Member Day” Hearing

By at 12 February, 2018, 6:24 pm

Member Day Hearing on Legislation to Improve Tax Administration

January 30, 2018

 

Statement for the Record

Karen Kerrigan

President & CEO

Small Business & Entrepreneurship Council

 

Committee on Ways and Means

Subcommittee on Oversight

U.S. House of Representatives

 

The Honorable Lynn Jenkins

Chairman

 

The Honorable John Lewis

Ranking Member

 

Chairman Jenkins and Ranking Member Lewis, thank you for hosting this “Member Day” hearing to review and learn about legislation that will improve the administration of the U.S. tax system.  Improving the efficiency of the tax system will be beneficial for small businesses, entrepreneurs and the self-employed. The Small Business & Entrepreneurship Council (SBE Council) is supportive of several of the ideas outlined by your colleagues at the hearing.

SBE Council is a national, nonprofit advocacy, research and education organization that works to protect small business and promote entrepreneurship. For nearly 25 years, our members, staff and advisors have worked to advance policies and initiatives to strengthen the ecosystem for startups and small business growth.  As someone who has served on the Taxpayer Advisory Panel, I know firsthand that the Internal Revenue Service (IRS) is always in search of practical ideas to improve their operations, compliance for taxpayers and overall efficiency.  With that in mind, I am submitting this statement for the record to voice SBE Council’s strong support for the legislation that Representative Steve Chabot, Chairman of the House Small Business Committee, outlined at the Member Day hearing.

The Small Business Owners’ Tax Simplification Act of 2017 (H.R. 3717) would make a significant and positive difference for small businesses and entrepreneurs.  This bipartisan bill is the work product of House Small Business Committee members. SBE Council provided ideas and feedback during H.R. 3717’s development, and our Entrepreneur-in-Residence testified in support of the bill before the House Small Business Committee.

As Ways and Means Committee members well know, the tax system is not fully modernized. Improving efficiency would make life easier for many Americans and save money for taxpayers. Certainly, the IRS has come a long way in making improvements and using technology to support the administration of our tax system. Still, legislative fixes are needed to improve taxpayer experience and to bring more common sense to compliance. Some thresholds in the tax code have not been updated since the 1950s, and various provisions have not kept pace with technological advancements and the modern economy. Other policies just never made sense from their very start.

H.R. 3717 would institute simple fixes that reduce costs, complexity, uncertainty for small businesses, and improve administration within the agency.

As proposed currently in H.R. 3717, several provisions would help to streamline administration within the IRS while making the tax system work better for small businesses and entrepreneurs.  These provisions include: changing the estimated tax due dates to align with calendar deadlines to make payments truly quarterly; allowing voluntary withholding agreements and training services between contractors and “gig” entrepreneurs without impacting worker classification; as well as uniform standards for the use of electronic signatures.  Another provision will modernize thresholds for self-employment income and Form 1099-Misc filings (the latter of which aligns with 1099k reporting requirements), which means paperwork reduction for both small businesses and the IRS.

SBE Council believes H.R. 3717 in total will simplify and modernize the tax system for entrepreneurs and small businesses, which would build upon some of the changes and important reforms in the “Tax Cuts and Jobs Act.” H.R. 3717 adds tremendous value to the overall goal of reducing complexity for taxpayers, while at the same time improving tax administration for the IRS.  This is a win-win-win for taxpayers, small businesses and those who are responsible for making sure the tax code is administered fairly and effectively.

Thank you for the opportunity to provide this Statement for the Record. Please do not hesitate to contact me if you have questions regarding my written statement.

Respectfully submitted,

Karen Kerrigan, President & CEO, SBE Council

 

 

 

 

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