For Immediate Release

CONTACT: Michael J. Donohue (202) 314-2044 or Melissa Sharp (202) 314-2068

As Tax Deadline Closes, Poll Finds Small Employers Frustrated by Complexity of Tax Code
Tax Experts Available to Discuss Impact of Taxes on America’s Job Creators

Note to editors: To schedule an interview with tax policy and research experts, contact NFIB Senior Media Manager Mike Donohue at 202-314-2044 or at michael.donohue@NFIB.org.

Washington, D.C., April 17, 2007 ─ As millions of Americans work to file their federal income-tax returns before today’s “Tax Day” deadline, the National Federation of Independent Business, the nation’s leading small-business advocacy group, today released a new survey on taxes and reiterated the tax policy priorities of America’s small-business owners.

“Tax Day is the perfect time to remind lawmakers about small-business owners’ tax policy concerns and priorities,” said NFIB Executive Vice President Dan Danner. “Small businesses power our nation’s economy and job growth, and yet high tax burdens and the complexity and inconsistency of the tax code are serious problems. And the looming threats of the Alternative Minimum Tax and the IRS’ rush to address the so-called tax gap are further cause for alarm.”

“Small-business owners strongly support making permanent the tax relief packages of 2001 and 2003,” continued Danner. “These tax reductions greatly helped small business, all taxpayers and the economy, and the failure to make them permanent inhibits planning and growth and leaves the threat of gargantuan tax increases just a few years down the road. Additionally, permanent relief from the death tax, which threatens small businesses and family farms, remains a top priority. Finally, the IRS must fully and accurately examine the scope of the tax gap and carefully weigh the effects of any new regulations on small firms before casting a wider net of audits and scrutiny.”

According to an NFIB Research Foundation Small Business Poll released today on Tax Complexity and the IRS, 88 percent of small-employer taxpayers used a tax professional to prepare their most recent federal tax return. For those employers who employ 20 or more people, the percentage that used a tax professional increased to 95 percent. Further, the two reasons small-employer taxpayers most frequently cite for using tax professionals are to assure compliance and the complexity of tax law.

“The risk of increased errors resulting from an overly complex tax code has forced small-business taxpayers to seek outside help to make decisions about their taxes,” said William J. Dennis, executive director of NFIB’s Research Foundation. “The complexities in the tax code increase administrative costs and cause enormous frustration for small-business owners.”

Other key findings from the poll include:

• Sixty-one percent of small-employer taxpayers typically consult a tax professional prior to making a major financial decision for the business.
• Of the 15 major portions of the Federal Tax Code evaluated, the provisions small-employer taxpayers most frequently rely on their tax professional to understand for them are: depreciation, methods of accounting, amounts subject to self-employment tax, capital gains/losses, and the Alternative Minimum Tax.
• Ninety-five percent of small-employer taxpayers think that the depreciation provisions of the Internal Revenue Code apply to them, but just 15 percent think they have a good understanding of depreciation requirements.
• Ninety-three percent of small-employer taxpayers think the methods of accounting rules apply to them, but just 16 percent think they have a good understanding of the method of accounting requirements.
• Eighty-two percent of small-employer taxpayers report that the AMT now applies to them while another 6 percent do not know.

To view the complete NFIB Research Foundation Small Business Poll on Tax Complexity and the IRS please visit www.nfib.com/research

###

The executive interviewing group of the Gallup Organization collected the data for this National Small-Business Poll for the NFIB Research Foundation. The interviews were conducted between December 28, 2006 and January 24, 2007 from a sample of small employers. “Small employer” was defined for purposes of this survey as a business owner employing no less than one individual in addition to the owner and no more than 249.

The National Federation of Independent Business (NFIB) is the nation’s leading small-business advocacy group. A nonprofit, nonpartisan organization founded in 1943, NFIB represents the consensus views of its members in Washington and all 50 state capitals. More information is available on-line at www.NFIB.com.