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Baucus To Reduce Burden On Small US Businesses

by Mike Godfrey,, Washington

17 November 2010

The United States Senate Finance Committee Chairman, Max Baucus, has announced that he will introduce legislation to repeal requirements for businesses to file forms that would report payments made for goods and certain services to the Internal Revenue Service (IRS).

The Treasury Department has estimated that more than USD345bn in owed taxes go unpaid each year. The reporting requirements, to be introduced in January 2012 and aimed at giving the IRS more tools to ensure all owed taxes were paid, would use Form 1099 to indicate how much money businesses pay to corporations. This was an idea proposed by the Bush administration to help better keep track of what businesses spend and earn, which in turn helps better keep track of tax liability.

However, following passage of the law, some business owners have expressed concern that, when the provision does go into effect, the forms would place too large a paperwork burden on businesses struggling in a still-recovering economy. In response to those concerns, Baucus has now indicated that he would repeal the new reporting requirements and look for other ways to improve tax compliance and keep taxes low.

“I have heard small businesses loud and clear and I am responding to their concerns,” Baucus said. “Small businesses are the backbone of our economy and they need to focus their efforts on creating good-paying jobs – not filing paperwork. I have fought hard for small businesses and worked hard this year to pass a Small Business Jobs bill that improves access to capital, stimulates investment and promotes entrepreneurship.”

Baucus’s offer to repeal the reporting requirements is said to have come after recent consultation with small business owners across the country. He said that he intends to continue partnering with the small business community to craft innovative solutions to enhance tax administration to make the US tax system fairer and without raising taxes.

TAGS: compliance | tax | small business | business | tax compliance | law | Internal Revenue Service (IRS) | legislation | United States

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