More On Legal & Compliancefrom The Advisor's Professional Library
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- Disaster Recovery Plans and Succession Planning RIAs owe a fiduciary duty to clients to prepare for disasters and other contingencies. If an RIA does not have a disaster recovery plan, clients financial well-being may be jeopardized. RIAs should also engage in succession planning, ensuring a smooth transaction if an owner or principal leaves.
Sen. Mary Landrieu, D-La., chair of the Senate Committee on Small Business and Entrepreneurship, introduced Tuesday legislation to repeal the expanded Form 1099 reporting requirement for small businesses that’s set to take effect in 2012.
The bipartisan group of co-sponsors to Landrieu’s bill include Senate Finance Committee Chairman Max Baucus, D-Mont., and Sens. Mark Begich, D-Ala.; Debbie Stabenow, D-Mich.; Jeanne Shaheen, D-N.H.; and Scott Brown, R-Mass. Baucus announced on Nov. 12 his intention to seek repeal of the expanded Form 1099 income reporting requirement, which requires small businesses to report payments made for goods and services.
“Businesses in Louisiana and across the country have made it clear that expanded Form 1099 reporting is not something they can handle,” Landrieu said in a statement. “Placing another regulatory burden on the very businesses that we are counting on to create jobs is just not smart. We have taken some important steps this year to improve the economic outlook for small businesses. I am committed to reducing regulatory burden for them when I can.”
In testimony before the Small Business Committee’s Nov. 18 hearing on the regulatory and administrative burdens on America’s small businesses, Larry Nannis, Chairman of the National Small Business Association (NSBA), said that small business owners “face an overwhelming regulatory burden in complying with Internal Revenue Service regulations.”Unlike large corporations, he said, small businesses “are an easy target,” as they lack the “hordes of accountants, benefits coordinators, attorneys, and personnel administrators” to help them keep pace with “the overwhelming regulatory and paperwork demands of the federal government.”
According to the Small Business Administration (SBA) Office of Advocacy research, Nannis said, the cost of tax compliance for small firms is 67% higher than for their larger counterparts. “For firms with fewer than twenty employees, the per-employee cost of complying with the tax code is $1,304,” he said. “This data tells us that we have crafted a tax system that is so complex and burdensome that small businesses are spending valuable time and financial resources on recordkeeping and outside help to ensure compliance instead of using these resources to invest and grow their business.”
A new form 1099 reporting requirement, Nannis continued, “signed into law as part of the Patient Protection and Affordable Care Act (PPACA) will only increase these costs. The new filings substantially increase the current requirement by expanding both the types of businesses and transactions considered reportable.”