Small business groups support bill to redirect IRS funds in Inflation Reduction Act

Forty-five national small business organizations have expressed support for a new bill that seeks to provide better protections against rising inflation and excessive auditing of small businesses.

The Society of Collision Repair Specialists (SCRS) joined 44 other entities in a letter to U.S. House of Representatives released Monday. Adrian Smith (R-Nebraska) and Michelle Steele (R-California) expressed “strong support” for the Family and Small Business Taxpayer Protection Act, known as HR 9092. The bill was introduced by Smith in September.

December. The 5 letter notes in part that the coalition appreciates the bill directing the Internal Revenue Service (IRS) to “expend resources to help and serve taxpayers,” rather than focusing on audit enforcement and penalties.

Smith introduced the bill in response to the Reducing Inflation Act (IRA) passed earlier this year. In August, a similar coalition including SCRS and more than 70 other national organizations signed a letter to House and Senate leaders expressing opposition to the IRA.

In that letter, the coalition wrote, “It is disheartening that Congress will allocate $45.6 billion (58 percent) to law enforcement, compared to the $800 allocated to the IRS in the Reduce Inflation Act.” billion in taxpayer services or 2022. Before considering how to punish taxpayers, the agency should address the large backlog the agency faces and how to better help taxpayers comply. Regulation.”

The August letter noted in part that the IRA had “did nothing to address” current problems such as record high levels of inflation, two consecutive quarters of negative economic growth, and a shrinking small business sector, even as it added to U.S. small business tax burden and family businesses.

In August, S Corporation Association President Brian Reardon told Repairer Driven News that the bill, which did not actually vote on inflation, “posed a significant threat to Main Street.” S Corporation was also a signatory to the December letter.

“The savings were all backloaded,” Reardon said in August. “Spending is up front, so at best, if anything, it’s inflation-neutral.” Reardon said research conducted by the University of Pennsylvania’s Wharton School, the Tax Foundation and the Congressional Budget Office showed that the IRA It may actually increase inflation in the short run.

Small businesses across the U.S. are reporting inflation problems affecting their bottom lines. National Federation of Independent Business (NFIB) spokeswoman Courtney Titus Brooks said 33 percent of NFIB member businesses reported that inflation was the most important issue in doing business for them in the past year. She told Repairer Driven News that the legislation, which focuses on enforcement rather than addressing the IRS backlog of “millions” of unprocessed paper tax returns, “does small businesses and taxpayers a disservice.”

According to the NFIB Research Center’s March COVID-19 survey, 22% of surveyed members said they had attempted to contact the IRS in the past 12 months regarding their business’s tax return information. Of these, 64% said the experience was not helpful. Titus Brooks said the lack of helpful interaction between the IRS and small business owners is “frustrating.”

For small and family-owned businesses, record-breaking inflation is taking its toll. Mandi Roberts, office manager for Tim and Jerri’s Auto Sales in Garden City, Kansas, told Repairer Driven News that inflation has affected every aspect of their business over the past year, from used car prices to mechanical service.

“One big thing is an oil change,” says Roberts. “We’ve had to raise the cost of these products by $20 over the past year, and some people are upset about that. We also have to be more careful with the vehicles we buy to make sure we don’t sell it upside down, which is That is the challenge we face now.”

Roberts is also a saleswoman for the business, which her father and mother have owned and operated in southwestern Kansas since 1993. Her family has made “less than what we’d like” to profit from their cars this year, she said. Her family has close relationships with many of their customers, and Roberts said rising inflation has led to some financing difficulties. setbacks.

“For example, this past year we had a young gentleman come in who qualified for a pickup with a lot of miles on it,” Roberts said. “The high mileage means the bank will only arrange payment so far, so the cost of the truck is inflated as a result.”

Roberts said rising used car prices have been a “big problem” for her family business, but she’s now seeing those prices starting to come down.
“We hope it ends quickly,” Roberts said.

Another thing that the FSPA will amend is the amount of resources devoted to IRS audits. Titus Brooks said the NFIB remained concerned that increased enforcement would “negatively impact law-abiding business owners”.

“If the vast majority of small business owners pay their corporate taxes on their personal tax returns, small business owners could be in trouble for increased audits,” Titus Brooks said. “The additional compliance burden and response to enforcement measures is an indirect tax on small business owners, requiring time and resources that are in short supply. A better approach for small businesses is to provide additional compliance assistance and customer service to help Law-abiding small business owners avoid inadvertent mistakes that could trigger an audit.”

Additionally, the Reduce Inflation Act allocates $2 billion through 2031 to fund domestic production of “high-efficiency hybrid, plug-in hybrid, plug-in electric drive, and hydrogen fuel cell electric vehicles.” It also changes the availability of tax credits for so-called “clean vehicles” that must contain a certain percentage of battery pack material from North America.

The bill provides that buyers of certain used clean vehicles will receive a tax credit of up to $4,000 or 30% of the sale price. However, the bill also states that the tax credit is limited to $3,750 per vehicle. Eligible commercial vehicle owners will receive a $7,500 tax credit.

The House Ways and Means Committee will consider HR 9092 when lawmakers reconvene on Jan. 1. 3.

More information

HR9092 – Family and Small Business Taxpayer Protection Act

https://www.congress.gov/bill/117th-congress/house-bill/9092/titles

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Featured image by Douglas Rissing/iStock

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