The Bush administration, long a stalwart supporter of
business—particularly small business—has introduced an
Internal Revenue Service (IRS) proposal in its 2007 budget that has
small-business advocates ready to fight.
The Bush budget, which was delivered to Congress in February,
includes a proposal to decrease the $345 billion tax gap—the
amount between what is owed the federal government and what
actually is paid.
According to the IRS, $109 billion of the gap is from
understated income accounts from small businesses and $39 billion
results from underreported self-employed tax accounts. It hopes to
begin to trim that amount next year.
In the proposal, the government wants credit card companies to
report annual reimbursement payments to merchants. In addition,
credit card companies would have to withhold taxes on payments to
companies that have not provided valid taxpayer identification
numbers. And the Department of Treasury would like credit card
companies to report aggregate payments in excess of $600...
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