October 7 2011 Copyright 2011 Business Research Services Inc. 301-229-5561 All rights reserved.

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House Majority Leader Eric Cantor said the House will vote this month on repeal of the contractor withholding tax. The measure, effective in 2013, requires federal, state and local governments to withhold 3% of payments to contractors.

Repeal has widespread support in Congress, but has never been brought to a vote. Cantor said the repeal bill will include an offset to make up the revenue raised by withholding.

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The Treasury Department will soon roll out a Do Not Pay list of ineligible contractors. The list will consolidate information that is now scattered among many different databases.

“This central portal will provide agencies information they need to prevent payments to ineligible businesses and individuals,” Jeffrey Zients, deputy director of the Office of Management and Budget, wrote in a blog post. “This tool is in production right now and will be available government-wide in a few months.”

The list is part of the Obama administration’s initiative to reduce improper payments in all federal programs.

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The IRS is offering employers a partial amnesty if they reclassify contract workers as employees. The tax agency says it plans to be more vigilant about employers’ misuse of the independent contractor status.

Under the Voluntary Worker Classification Settlement Program, an employer who agrees to convert independent contractors to employee status won’t face an IRS audit of its past practices. A participating employer will pay 10% of the employment tax liability for the most recent year, with no interest or penalties.

IRS Commissioner Doug Shulman said, “This is part of a wider effort to help taxpayers and businesses to help give them a fresh start with their tax obligations.”

Details are available at www.irs.gov/pub/irs-drop/a-11-64.pdf.

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Oscar Quiles, president of Pentaq Manufacturing Corp., of Sabana Grande, PR, was named the National Minority Small Business Person of the Year by SBA at the annual Minority Enterprise Development Week conference in Washington.

Quiles’s 8(a) company manufactures uniforms and tents for the armed forces. The company has 160 employees and $3.2 million in revenues.

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SBA honored Karen Say, president of Saybr Contractors in Tacoma, WA, as its 8(a) Graduate of the Year. The award was presented during Minority Enterprise Development Week.

Say founded her company in 1997, specializing in upgrading underground storage tanks, then branched out into other construction and environmental services. Sayb won $50 million in contracts before graduating from the 8(a) program.

SBA Administrator Karen Mills presented her Administrator’s Award to Teresa L.G. Lewis, OSDBU director at the Treasury Department.

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The government is being told to do more with less. For federal employees, that means less space.

Rep. Jeff Denham, R-CA, chairman of the public buildings subcommittee that approves new leases for office space, says he is considering setting a standard space utilization rate that would average out to no more than 157 square feet per person. The previous standard was 200 square feet.

Individual employees’ spaces would be even smaller; the 157 square feet includes certain common areas such as conference rooms and break rooms.

A GSA study found that private-sector rates vary from 60 square feet for “hoteling” work spaces to 130 square feet for administrative staff and up to 300 square feet for executives.


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