Celebrating resilience and renewal during National Small Business Week

Take a closer look at how the IRS is working to ensure small business owners and self-employed individuals have the tools and information they need to remain resilient and support their employees during these challenging times.

Get to know the IRS, its people and the issues that affect taxpayers

By Darren Guillot and De Lon Harris
CL-21-26, September 9, 2021

For more than 50 years, the U.S. Small Business Administration (SBA) has celebrated National Small Business Week. The IRS has been proud to support this effort and recognize the significant contributions of America’s entrepreneurs and small business owners.

This year’s National Small Business Week recognizes the challenges small businesses have faced in navigating through the continuing coronavirus pandemic while supporting their employees and communities. The SBA’s virtual conference, being held September 13-15, focuses on the renewal of the small business economy and the resilience of business owners as they look for ways to build back from economic hardship they have experienced for more than a year.

The IRS is a proud partner of the SBA, and our agency is excited to participate in this year’s virtual conference. We encourage you to visit the IRS National Small Business Week web page, which is designed to provide helpful information, resources and videos for small businesses and entrepreneurs.

As the Commissioners for Collection and Examination in the Small Business/Self-Employed (SB/SE) organization, we can assure you that we are committed to assisting small businesses and self-employed individuals in meeting their tax obligations, as well as taking advantage of available tax relief to help those affected by the pandemic. Since A Closer Look launched on IRS.gov last October, we and other SB/SE leaders have written posts about various topics that have an impact on small businesses. In this post, we’d like to give you an overview of key information to make sure small business and self-employed individuals and small business owners have the tools and information to remain resilient and support their employees during these challenging times.

The following legislation has been enacted during the course of the pandemic to provide tax relief to businesses:

• The Credit for Sick and Family Leave entitles eligible employers to receive a credit in the full amount of the required sick leave and family leave that the law provides to employees dealing with health and family issues related to the COVID-19 pandemic.
• The Employee Retention Credit was designed to encourage businesses to keep employees on their payroll. The maximum tax credit is $7,000 per employee for eligible employers financially affected by COVID-19. The most recent information on the timelines for qualifying wages, including health plan expenses, can be found here.
• The Carryback for Net Operating Losses allowed businesses to carry net operating losses back over five years. The IRS issued Notice 2020-26 and Revenue Procedures 2020-23 and 2020-24 to clarify this CARES Act provision and help businesses and partnerships take advantage of the relief it provided.

Last December, legislation extended the Work Opportunity Tax Credit (WOTC) through the end of 2025. This long-standing tax benefit encourages employers to hire workers certified as being members of any of 10 targeted groups facing barriers to employment, including qualified veterans and summer youth employees who live in empowerment zones. With millions of Americans having been out of work at one time or another since the pandemic began, this also includes long-term unemployment recipients who have been unemployed for at least 27 weeks and received state or federal unemployment benefits during part or all of that time. To learn more about how to qualify for this tax credit, visit the WOTC webpage.

Outside of COVID-19 tax relief, our division, like many businesses, has had to innovate and change the way we operate. As discussed in our previous Closer Look post on the Taxpayer Digital Communication initiative, we were already on a path to innovate our business processes to make engaging with the IRS and fulfilling tax obligations easier through digital options, but the pandemic required us to accelerate work in this area. Our Taxpayer Digital Communication initiatives include secure messaging, a text chat function with outbound notifications that have greatly improved our ability to support taxpayers. Like many businesses that had to close offices, these enhancements helped us address work limitations due to the pandemic-related mandatory telework operations.

Also, in the digital realm, the IRS has launched a new online option for tax professionals to obtain signatures from business (and individual) clients and submit authorization forms electronically. This development is an important first step in our ongoing efforts to expand digital options for taxpayers and tax professionals using electronic signatures and online uploads. This option applies to Form 2848, Power of Attorney and Declaration of Representative, and Form 8821, Tax Information Authorization.

Our colleague, Scott Irick, the director SB/SE Examination, recently wrote a Closer Look post about Employment Tax Initiatives that shared information about back-up withholding, combined annual wage reporting and our efforts to help small business owners and self-employed taxpayers comply with their responsibilities for employment taxes while maintaining fairness in the system by enforcing the law where taxpayers do not comply. For example, one of the programs Scott discussed is the Voluntary Classification Settlement Program, which is a great avenue for taxpayers to correct the treatment of their workers, without penalties or an audit, through reclassifying their workers as employees for employment tax purposes for future tax periods with partial relief from federal employment taxes. Another program Scott mentioned assists employers when they are unsure how to treat workers for employment tax purposes or when a worker questions how an employer has classified their employment status.

In July, we wrote about how we recently employed QR codes in our collection notices so taxpayers can use their smartphone to scan a QR code and conveniently access pages on IRS.gov. Here they can create or log in to their online account, apply for a payment plan through Online Payment Agreement (OPA), or contact the Taxpayer Advocate Service. We have also worked to reduce taxpayer burden by simplifying the language on our notices, grouping topics into specific sections, and providing self-help options so taxpayers can resolve their account issues themselves rather than having to call the IRS.

We’d also like to take this opportunity to ask small businesses to help us promote the advance Child Tax Credit to your employees who might be eligible. This is a terrific way to help your employees receive money at a time when they can really use it, especially now that they can receive advance payments up to half of their credit amount in monthly installments through December. You can share information available on IRS.gov with your employees through your existing employee communications tools.

We hope attendees of this year’s virtual National Small Business Week conference come away with ideas and tools to continue operating effectively and supporting their employees during these uncertain times. One resource we highly recommend for small business owners and self-employed individuals is the Small Business and Self-Employed Tax Center on IRS.gov. This one-stop-shop for information applies to taxpayers who file Form 1040 or 1040-SR, Schedules C, E, F or Form 2106, as well as small businesses with assets under $10 million.

We will continue to work diligently to provide guidance and information on relief and tools for the small business community and ensure fairness in the tax system for all.

Darren Guillot (Collection) and De Lon Harris (Examination)
SB/SE Commissioner