December 3, 2002

The TAP members for the SB/SE Payroll Issue Committee met via telephone on Tuesday, December 3, 2002.

Members in Attendance:

• Jim Abraham
• Agena Clayton
• Denise Bigger
• Norma Bishop
• Charlotte Cassady
• Justin Doucette
• Keith Johnson
• David Meyer
• Theodore Perros
• Nancy Quarles
• Leonard Steinberg
• Steven Wood
   
   
   
• DFO: Mary Peterson
• IRS Program Owner: Margie Kinney
• TAP Analyst: Mary Ann Delzer

Roll call was taken, the agenda reviewed and minutes from 10/7/2002 approved without discussion. Concerns about the delay with Sprint conferencing were discussed. ACTION: Peterson will contact Sprint about the panels concerns.

Panel Member Introductions
All panel members introduced themselves and gave a short description of their backgrounds.

ACTION: Peterson will send out an updated roster.

ACTION: Peterson will re-send committee biographies and pictures via mail.

Discussion of Permanent Chair
At the recommendation of TAP Chair Seuntjens, the selection of a nice-chair was discussed. Cassady volunteered to be the acting vice-chair. A permanent chair and vice-chair should be selected soon for the benefit of the Joint Committee. This might best be done at a face-to-face meeting.

ACTION: Committee members should advise Peterson of their interest in serving as chair or vice-chair by December 20, 2002.

Unfinished Business
Measures for success: Steinberg began the discussion with the question of whether to look at number or quality.

Kinney explained what four items she sees as signs of success:

1. Input from a significant and diverse group of small business owners
2. Input that addresses the issue
3. Recommendations that are supported by the input received
4. Recommendations that are useful and possible to implement in a short period of time Bishop stated the she sees the subcommittees forming outreach plans to meets the IRS owners needs and that measure will develop from these sub-committees. Peterson shared that generic measures for the whole committee could be developed or measures for specific sub-committees developed from their action plans. Perros expressed his concern about letters received from taxpayers and how these ideas from individuals are being restricted. Peterson explained the Issue committees are to work with a directive from the IRS, while the Area committees are the forums for the ideas from individuals. Johnson agreed and stated that the Southeast Area is the avenue for the non-payroll related issues. Kinney said IRS would add additional payroll issues to the agenda if the issue brought forward was something IRS is already addressing and would benefit from hearing public opinion.

Meyer asked for a definition of small business as opposed to large and mid-sized business. Kinney stated there are several definitions:

• The Small Business Administration uses less than 500 employees for "small" business. In actuality, 50% of all businesses have fewer than 10 employees.
• IRS puts business with assets of $10 million or more in the Large and Mid-sized Division. As a result IRS is making those with less than $10 million in assets small businesses.
• Congress has recently passed legislation, the Small Business Paperwork Relief Act that asks agencies to reduce information collection burden for small businesses with less than 25 employees.

ACTION: Reach agreement on a definition for purposes of our information gathering and recommendations.

Abraham stated a summary of the question at hand or a summary of what information he needs to know would help him understand the issue committee better. Bishop suggested that organizing around the sub-committees would be beneficial and then the knowledge necessary will become apparent.

Peterson shared her concern that the remaining items of unfinished business need to be completed.

ACTION: Committee members are to review the remaining areas of unfinished business and send all proposed changes to Peterson by December 20, 2002. Peterson will have final documents to the committee by December 25, 2002.

Bishop suggested two items for the operating procedures. She asked that the committee use a standard subject line for email, "TAP SB/SE." She also asked that all files/attachments include a date and the initials of the person who prepared the document. Steinberg agreed and added that he would appreciate that he and Peterson be copied on all emails. All agenda items should go to both Steinberg and Peterson.

ACTION: Peterson will add to the agenda a list of all the documents to be discussed during the meeting.

ACTION: Committee members should notify Peterson of their preference for receiving documents, mail or email.

Presentation of Payroll Issues
Kinney led the discussion on sub-committee formation. She referred to the document entitled, "Revised List of Questions for Suggested Sub-committee Development," and gave an explanation of each of the three proposed sub-committees.

1. Federal and State: Employers have a great burden as federal/state/local governments have different rules, regulations, laws, filing dates, deposit dates, etc. How can we work together better to relieve this burden on employers?
2. Taxpayer Opinion-Deposits: How can IRS help employers avoid deposit penalties? Can we simplify the due dates, i.e., same date as state, due when payroll completed, increase use of electronic payments?
3. Taxpayer Opinion-Reporting: Research shows that 80% of SB/SE filers use a professional for their 1040 filings, but not for their employment taxes. Only 16% of employment tax returns are filed electronically. How would burden increase if IRS required preparers to sign employment tax returns? How can IRS increase electronic reporting?

Kinney reported that in January, new software would allow taxpayers to file employment tax returns electronically. Businesses will need to use an ERO, employment tax software that provides for e filing, or become their own transmitter. They will not need to be part of a bulk filing process. Many taxpayers do not want to use payroll services as they view them as too expensive or produce too many errors.

Kinney would like to meet with each sub-committee to develop a template to use to gather information from taxpayers. A standard format or template will make the data easy to organize, simplifying the analysis and the development of recommendations.

ACTION: Committee members should rank their sub-committee preference and indicate if they are willing to serve a chair. Responses should be sent to Peterson by December 20, 2002. Peterson will notify panel members of their sub-committee assignments by December 25, 2002.

Future Meetings
Peterson explained that the federal budget has not yet been passed. Despite this concern, she will pursue the possibility of a face-to-face meeting on January 11, 2003. The city preferred for this meeting is New Orleans.
ACTION: Peterson will notify the committee of the meeting plans as soon as possible.

Next Scheduled meeting:
January 11, 2003, in New Orleans or a teleconference January 14, 2003 at 3:00 p.m. EST.