• NASE Puts Micro-Businesses Face-To-Face With Legislators
• New Regulations on HSAs Hidden in House Tax Bill
• IRS Tax Help A No-Go, Say Micro-Businesses
• Non-Compliant Taxpayers Could Lose Federal Contracts
• Spotlight: Plain English Bill Set For Vote

NASE Puts Micro-Businesses Face-To-Face With Legislators

The NASE is hitting the open road this year on a nationwide town hall meeting tour and we would love to join you at a local meeting. A town hall serves as an open forum where legislators meet with constituents and listen to the issues you face. These forums also give them the opportunity to talk about their accomplishments in Washington, D.C. - or defend their lack of progress. During the inaugural town hall meeting in Oklahoma, NASE Member Carol Moody of Sapulpa, Okla. asked her legislator about improving access to health care. Afterwards, she shared how the struggle for coverage is a constant issue among micro-businesses: “Do I believe it is important for self-employed and micro-business owners to participate in advocacy activities such as this one? More now than ever. There are more and more people becoming self-employed because of necessity. Being a single self-employed business owner, I have not been able to afford quality health care. I have always made sure that my kids have health care but even that health care isn't good.” Visit the NASE Town Hall Program website to read more about Carol’s town hall experience and other town hall events. You can also sign-up to participate in a town hall meeting in your area. For more information, please contact us at advocacy@nase.org.

New Regulations on HSAs Hidden in House Tax Bill In honor of Tax Day, House lawmakers have been working on a controversial legislation package that would negatively affect individuals who hold health savings accounts (HSAs). If passed, a clause in the Taxpayer Assistance and Simplification Act (H.R. 5719) would tack on extra fees for account holders to fund extensive reviews of HSA expenditures. Similar requirements are already in place for individuals using flexible spending accounts (FSAs), which are funded and owned by an employer. HSAs are funded by taxpayer contributions and owned by an individual. The NASE has joined forces with other concerned groups requesting lawmakers strike down the provision. In a joint letter to the U.S. House of Representatives, the NASE argues that using cookie-cutter regulations to monitor HSA spending does not make sense: “There are significant differences between Flexible Spending Accounts (FSAs) which require substantiation and HSAs: 90 percent of HSA transactions are electronic, versus 10 percent of FSA transactions, HSAs are owned and kept by account holders, while FSAs are pre-funded and operate under a “use-it-or-lose-it” system. Further, if you leave your job, your HSA is portable and goes with you, while an FSA reverts to your old employer.” HSA account holders already report their health care spending to the Internal Revenue Service (IRS). From there, the agency has the authority to audit suspect accounts and impose penalties for improper spending. The White House recently cited the clause in its decision for an impending presidential veto of this tax legislation.

IRS Tax Help A No-Go, Say Micro-Businesses Nearly one out of three micro-business tax filers came to a dead end while seeking assistance from the IRS, according to a study release by the NASE. When asked to give an opinion of why the IRS staff was unable to answer a tax question, micro-businesses listed limited or inadequate training of IRS staff contacts as their top answer. Other entrepreneurs wished their IRS staff member knew more about industry-specific questions or rapid tax law changes. Questions about regional differences also left business tax filers and IRS personnel stumped. “The self-employed need to feel confident that the IRS can provide them with the answers needed to comply with their business tax obligations. Likewise, Congress needs to prioritize tax simplification and recognize that last minute tax law changes can cause significant compliance problems for micro-business,” remarked Kristie Darien, executive director of the association’s legislative office. The nation’s micro-businesses continue to work hard to meet their tax obligations, yet are sometimes hindered by unreliable and unpredictable answers from IRS tax assistance personnel. When asked how well the IRS dealt with the tax issues that most matter to the nation’s small firms, fifty-eight percent scored the agency as either “fair” or “poor.” To view full survey results and respondent feedback to open-ended questions on the IRS, visit advocacy.nase.org.

Non-Compliant Taxpayers Could Lose Federal Contracts Joining other legislation designed to increase tax compliance, a new bill would bar companies who have failed to uphold their tax responsibilities from competing for federal contracts or grants. The legislation comes in response to reports from the Government Accountability Office which illustrated the repeated awarding of contracts to companies with negligible tax compliance history. The agency uncovered $3.3 billion in tax debt from 33,000 federal contractors in 2005. The bill offers eligibility guidelines, which disqualify any company that has an IRS-imposed lien; partnerships or corporations owned by an individual with outstanding tax obligations would also be prohibited. Firms currently participating in a payment schedule with the IRS would not be included in this group. Democratic presidential candidate Barack Obama, D-Ill., has introduced a companion measure in the U.S. Senate.   Quick Facts: Plain English Bill Set For Vote Lawmakers are working to turn archaic, hard-to-understand federal forms into something more readable for micro-businesses. House lawmakers, led by bill sponsor Rep. Bruce Braley (D-Iowa), are working to move the Plain Language in Government Communications Act this week. The House Oversight and Government Reform Committee approved the measure in March, while the Senate version received an endorsement of last week. Both measures are set to be voted upon soon. NASE’s Keith Hall, national tax advisor, testified before Congress in support of the bill in February. For more information on how the NASE is working to reduce the legislative burden on micro-business, visit advocacy.nase.org.   Lawmakers and media outlets across the country rely on and regularly cite the NASE as a source of small and micro-business expertise. Help the NASE make sure the micro-business perspective is heard by taking this month’s poll. Click here to log-in and participate. Washington Watch Online Visit the NASE Advocacy Web page 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. Web site: http://advocacy.NASE.org.