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Q&A Session on 3 Percent
Government Contract Withholding |
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Dear Financial Leader,
Earlier this year the AICPA called on Congress in congressional testimony and letters to repeal the withholding provision, calling it an undue burden for both governments and contractors and unnecessary, given existing tools that already monitor contractors’ federal tax compliance. The AICPA is actively monitoring the proposed legislation to repeal the 3% withholding rule for government contracting in Congress. At this time there is no plan for a vote in Congress on this issue. Also, there is no specific guidance published or any forms.
Since businesses involved in government contracting need to be prepared to begin capturing the appropriate information so that they can do the proper withholding and make the appropriate payments we wanted to let you know that the IRS is sponsoring two internet based information sessions. The content for the two sessions is identical and they are being held on August 4 and August 18, 2011 at 2:00pm EST and will provide a brief update on the enactment of required three percent withholding on payments by certain government entities beginning in 2013. These sessions will also be open for questions. The sessions will focus on which governments are required to withhold under these rules, what payments are subject to the withholding, and procedures for reporting and paying the withheld amounts. For more details visit the IRS website.
We will continue to update you as this issue develops. The AICPA works diligently to advocate on behalf of our profession and we will continue to keep you informed through email, articles and our BusIndNews newsletter. You also can find out more about this and other important information affecting our profession in the Journal of Accountancy, AICPA News Update, BusIndNews and CPA Letter Daily.
Sincerely,
Carol Scott, CPA, MBA
Vice President - Business, Industry & Government
American Institute of Certified Public Accountants
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