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Be the first to know about legislative action that affects you and your business.
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APRIL 21, 2004
Action Alert:
Would a New IRS Withholding Scheme Affect
Your Business?
In February, Washington Watch first let
you know about the
IRS Taxpayer Advocate Report blaming an $81
billion "tax gap" of unpaid taxes from 2001 on
the self-employed for deliberate underreported
or non-filing of income. In the report, the
Advocate’s proposed solution to Congress to
recoup the lost revenue is to require that
employers withhold 3.5 to 5 percent of payments
to independent contractors.
Since then, the NASE has worked to combat the
charge that the self-employed as a group
deliberately try to subvert their tax
obligations, and fight the recommendation of a
new withholding scheme. Such a proposal would
significantly add to the compliance and cash
flow challenges of micro-businesses. In
addition, since the proposal only applies to
sole proprietors, it blatantly discriminates
against this business structure.
The NASE needs your help, though, to put a
personal face the issue. Are you an independent
contractor? If so, how would the withholding
scheme affect your cash flow? Do you hire
independent contractors in your business? What
kinds of administrative burden will this place
on your business?
Click here to Tell Your Micro-Business
Story. The NASE will then take your story to
Congress to ward off any new withholding
schedule for independent contractors.
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