IRS sets date for 3 percent withholding tax hearing
Since the tax was enacted in 2006, concerns have been raised about the administrative burdens of compliance and the effects on companies' revenues.
The 3 percent contractors' withholding tax is getting a hearing before tax officials.
The Internal Revenue Service announced it has set a hearing for Sept. 12 about the tax that would withhold payments to contractors. Officials said they are gathering more input on a proposal they made in May, according to a Federal Register notice dated Aug. 17.
In May, the IRS said it received numerous comments on the possible tax, which would affect federal, state and local governments on contracts awarded after Dec. 31, 2012.
Overall, respondents said they were concerned about the administrative burdens of compliance and the effects on companies’ revenues.
The IRS then postponed the start date for withholding payments. The tax became law in 2006 but has been postponed since then.
The tax provision has been promoted as a way to narrow the tax gap and make delinquent companies pay their share of taxes, but opponents insist the provision would hurt businesses.
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