November 15, 2017

Dear Tennessee delegation members,

As small business tech entrepreneurs in Tennessee, we depend on smart tax policies. Small businesses create 64 percent of private sector jobs and drive economic growth throughout the country. Unfortunately, complicated tax codes and heavy tax burdens hurt our ability to support our companies and our communities. As legislators, you have the unique opportunity to sponsor two common sense tax measures that will simplify the tax code for innovators like us across the state. We urge congressional consideration of the Preserving Taxpayers’ Rights Act and the Small Business Owners’ Tax Simplification Act to bolster Tennessee’s entrepreneurs through small, simple changes to the tax code.

We encourage you to consider the Preserving Taxpayers’ Rights Act (H.R. 3220), which would benefit small businesses by addressing several procedural challenges we face when responding to Internal Revenue Service (IRS) audits. First, H.R. 3220 would allow taxpayers to resolve tax audit issues with the Office of Appeals, rather than shouldering costly, time-intensive litigation in Tax Court. Second, the legislation would modify the IRS’s ability to designate cases for litigation, limiting them to “listed transactions” with a high probability of tax avoidance. Outside of these transactions, small businesses could have their cases heard in the Office of Appeals and better defend their rights at the IRS.  Third, the bill would provide important protections for small businesses by aligning requirements for “designated summons” to target only uncooperative taxpayers trying to run out the clock on the statute of limitations for their tax audits. This bipartisan bill would help improve the IRS auditing process and make it easier and more cost-effective for small businesses and entrepreneurs across America.

We also argue that the Small Business Owners’ Tax Simplification Act (H.R. 3717) should be included in broader tax reform efforts. A key component of the legislation would allow small business owners to qualify for cafeteria plans such as health savings accounts (HSAs). A key component of the legislation would allow small business owners to qualify for cafeteria plans such as health savings accounts (HSAs), which the complexity of the current tax code discourages them from providing to employees. The legislation would also align quarterly reporting deadlines with current quarter ends, making it easier for small businesses to pay taxes. H.R. 3717 also includes important provisions to simplify worker classifications, which would allow small businesses, particularly those in the sharing economy, to provide training to their contractors without having them classified as full-time employees under IRS rules.

On behalf of small businesses and tech entrepreneurs, we urge you to cosponsor these bills to keep Tennessee a leader in innovation. Our growth and success depend on your consideration of these smart tax policy changes. For more information or questions about H.R. 3717, please contact Rob Yavor of the Small Business Committee at [email protected]. To learn more about H.R. 3220, please contact Justin Sok of Rep. Jason Smith’s office at [email protected].

Sincerely,