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�------------------------------------------------------------------------------------
REMARKS BY PRESIDENT WILLIAM JEFFERSON CLINTON
REDUCING BURDENS ON SMALL BUSINESSES
TREASURY DEPARTMENT
JUNE 9, 1995
[Acknowledgements: Paul Condit, introduction; Vice President
Gore; Secretary Rubin; Commissioner Chater; Commissioner
Richardson; Deputy Secretary Glynn, and friends.]
I want to thank Paul Condit for his vivid explanation of the
problem faced by so many small businesses.
I'm sure he'd like to
take one of his John Deere tractors and just plow all the
unnecessary paperwork away. But, his tractors were built for
farming, not for clearing away excess paperwork.
The government
created his problem, and it's up to the government to solve it.
I ran for President because I wanted to make government work
better for the American people.
I believe we need a government
that shrinks bureaucracy and increases opportunity.
One that
empowers people to make the most of their own lives. And one
that enhances security at home and abroad.
The key to our future is to create more opportunity, but also to
have all of us assume more responsibility. That's what all of
you are doing.
Business is the engine that powers the American
Dream. And small business is truly the backbone of our economy.
Small businesses employ more than 60 percent of our people, and
create more than half of what we sell. So, we owe it to you to
make sure government is a partner, not an impediment.
That's why I created the National Performance Review and put Vice
President Gore in charge.
For the past two years, he and his
team have made remarkable progress in improving the way
government serves the American people. We have dramatically
reduced the size of government. We've already eliminated more
than 100,000 positions. And we're well on our way to reducing
government by a total of more than 270,000 positions, bringing it
to its smallest size since John Kennedy was President. We have
cut bureaucracy and red' tape. We have streamlined and
consolidated services. A few weeks ago, I signed the Paperwork
Reduction Act to ease the paperwork burden throughout the Federal
government. But, we must do more, especially for businesses.
On Monday, we will focus the nation's attention on the needs of
small businesses when I convene the 1995 White House Conference
on Small Business. This will be only the third conference since
our nation was founded, and the last one of the 20th· century. A
healthy business community is the key to our success in the new
global economy. We must do all we can to keep you strong.
That's why we're here today.
Paul Condit is not alone. We
continually hear from businesses about the cost of complying with
1
'
!.'.,
;:
,.
�government rules.
For years, small and big businesses have been
telling Washington to "get real" about the absurd, . frustrating,
and costly paperwork burdens that have been placed on you.
You've been sending the same wage and tax information to a number
of different government agencies so they could each have their
own special report.
It has been very convenient for the
government. Now it's government's turn to be convenient for
business owners.
I have asked the Department of Treasury, specifically IRS, and
the Department of Labor, along with the Social Security
Administration to form a partnership to cut through this mountain
of paperwork.
The Department of Treasury has taken the lead by
spearheading the Simplified Tax and Wage Reporting System. As a
result of their work, today we are announcing a plan that should
lead to the elimination of.the need to file W-2 data in multiple
places. You will only need to file once and you will have a
single point of contact for customer service. This will save
time. This will save hassle. This will save money -- almost $1
billion annually. When we free you from the burden of paperwork,
you can do what you do best -- create jobs, opportunity, services
and products for the American people.
In addition, I will be sending legislation to Congress that will
remove the legal barriers that keep Federal and State agencies
from working together in a common sense way to ease the paperwork
burden on all taxpayers.
If you are like most taxpayers, you currently have to fill out
both a Federal and a State income tax form.
And depending on
where you live and work, you might also have to do a city income
tax form.
Most of the information on the state and city forms is a repeat
of what's on the Federal form.
So, with some teamwork and tax
system modernization, the Federal government is going to create
partnerships with state and city governments to eliminate the
need for duplicate filings. Already, in 29 states, taxpayers can
satisfy both their Federal and State personal income filing
requirements with a single electronic transmission. More than
1.5 million returns were filed that way this year. Next year, 32
states are going to participate.
My Administration will clear away the barriers to full
partnership with State and local governments for employment as
well as personal tax information. We estimate that with
participation by 20 percent of states in such a partnership, by
the year 2000, we can reduce the burden to taxpayers by $1.5
billion and save the government millions of dollars in the
process.
I invite governors and mayors across the nation to join us in
2
·'
i
�having businesses and taxpayers file their information only once!
This is the right way to fix government -- to redesign it to
better serve citizens in partnership with states and cities.
This is the kind of service you should expect from a modernized
tax system -- a system that is designed for your convenience.
That is what government reinvention is all about -- making
government work better and cost less for you.
I would now like for Treasury Secretary Rubin, Deputy Labor
Secretary Glynn, SSA Commissioner Chater, and IRS Commissioner
Richardson to come up and sign a pledge to work toward those
goals.
[Rubin, Glynn, Chater, and Richardson sign the pledge]
And, now I'd like to ask Paul Condit, as small business owner and
taxpayer, to sign as a witness.
[Paul Condit signs and stands with President for photo]
[END EVENT]
3
�-~·-,
------------------------
REMARKS BY PRESIDENT
waLIAM JEFFERSON CLINTON
REDUCING BURDENS ON SMALL BUSINESSES
TREASURY DEPARTMENT
JUNE 9, 1995
�[Acknowledgements: Paul Condit, introduction; Vice
President Gore; Secretary Rubin; Commissioner Chater;
Commissioner Rich&rdson; Deputy Secretary Glynn, and
friends.]
I want to. thank Paul Condit for his vivid explanation of
the problem faced by so many small businesses. ·
I'm sure he'd like to take one of his John Deere tractors
and just plow all
th~
unnecessary paperwork away. But,
his tractors were built for farming, not for clearing away
excess paperwork. · The government created his
problem, and it's up to the government to solve it.
2
�----------------------------------------.
I ran for President because I wanted to make
government work better for the American people. I
believe we need a government that shrinks bureaucracy
and increases opportunity. One that empowers people
to make the most of their own lives. And one that
enhances~ security at home and abroad.
The key to our future is to create more opportunity,- but
also to have all of us assume more responsibility.
That's what all of you are doing. Business is the engine
that powers the American Dream. And small business
is truly the backbone of our economy. Small businesses
employ more than 60 percent of our people,· and create
more than half of what we sell.
3
�- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
So, we owe it to you to make sure government is a
partner, not an impediment.
That's why I created the National Performance Review
and put Vice President Gore in charge.
For the past two years, he and his team have made
remarkable progress in improving the way government
serves the American people. We have dramatically
reduced the size of government. ··We've already
eliminated more than 100,000 positions. And we're well
on our way to reducing government by a total of more
than 270,000 positions,
bringing it to its smallest size
\
.
since John Kennedy was President.
4
�We have cut bureaucracy and red tape. We have
streamlined and consolidated services. A few weeks
ago, I signed the Paperwork Reduction Act to ease the
paperwork burden throughout the Federal government.
But, we must do more, especially for businesses.
On Monday, we will focus the nation's attention on the
needs of small businesses when I convene the 1995
White House Conference on Small Business. This will
be only the third conference since our nation was
founded, and the last one of the 20th century. A
healthy business community is the key to our success in
·the new global economy. We must do all we can to
keep you strong.
5
�-----------------------~---------
That's why we're here today. Paul Condit is not alone.
We continually hear from businesses about the cost of
complying with government rules.
For years, small and big businesses have been telling
Washington to 11 get real 11 about the absurd, frustrating,
and costly paperwork burdens that have been placed on
you. You've been sending the same wage and tax
_information to a number of different government
agencies so they could each have their own special
report. It has been very convenient for the government.
Now it's government's turn to be convenient for business
owners.
6
�I have asked the Department of Treasury, specifically
IRS, and the Department of Labor, along with the Social
Security Administration to form a partnership to cut
through this mountain of paperwork.
The Department of Treasury has taken the lead by
spearheading the Simplified Tax and Wage Reporting
System. As a result of their work, today we are
announcing a plan that should lead to the elimination of
the need to file W -2 data in multiple places. You will
only need to file once and you will have a single point
of contact for customer service. This will save time.
This will save hassle. This will save money -- almost
$1 billion annually.
7
�When we free you from the burden of paperwork, you
can do what you do best -- create jobs, opportunity,
services and products for the American people.
In addition, I will be sending legislation to Congress
that will remove the legal barriers that keep Federal and
State agencies from working together in a common
sense way to ease the paperwork burden on all
taxpayers.
If you are like most taxpayers, you currently have to fill
out both a Federal and a State income tax form. And
depending on where you live and work, you might also
have to do a city income tax form.
8
�Most of the information on the state and city forms is a
repeat of what's on the Federal form.
So,- with some
teamwork and tax system modernization, the Federal
government is going to create partnerships with state
and city governments to. eliminate the need for duplicate
filings. Already, in 29 states, taxpayers can satisfy both
their Federal and State personal income filing
requirements with a single electronic transmission.
More than 1.5 million returns were filed that way this
year. Next year, 32 states are going to participate.
9
�- - - - - - - - - - - - - - - - - - - - - - - - - -
My Administration will clear away the barriers to full
partnership with State and local governments for
employment as well as personal tax information. We
estimate that with participation by 20 percent of states
in such a partnership, by the year 2000, we can reduce
the burden to taxpayers by $1.5 billion and save the
government millions of dollars in the process.
I invite governors and mayors across the nation tojoin
us in having businesses and taxpayers file their
information only once! This is the right way to fix
government -- to redesign it to better serve citizens in
partnership with states and cities.
10
�-
------------------------------------------------
This is the kind of service you should expect from a
modernized tax system -- a system that is designed for
your convenience. That is what government reinvention
is all about -- making government work better and cost
less for you.
I would now like for Treasury Secretary Rubin, Deputy
Labor Secretary Glynn, SSA Commissioner Chater, and
IRS Commissioner Richardson to come up and sign a
pledge to work toward those goals.
[Rubin, Glynn, Chater, and Richardson sign the pledge]
11
�And, now I'd like to ask Paul Condit, as small business
owner and taxpayer, to sign as a witness.
[Paul Condit signs and stands with President for
photo]
[END EVENT]
12
�TABLE OF CONTENTS
SUBJECT
Point Papers/Q&A
Fed/State
--~~ ~TAWRS
-?"
Debt Management
A
B
c
Legislation
D
MOUs
Treasury, Social Security, Labor
IRS, Social Security, Labor
E
F
Props/Graphics
US Map-State Participation
Vision: Single Filing
Seamless Tax Administration
Current Burden
Increased Fed State Partnership
G
Invitation List
H
Media
---->---~ Bullet Points for the President's Speech
, ._ President's Speech
Secretary Rubin's Quote
·c:=-~Press Release
Background
Agendas/Minutes
May 24, 1995
May 30, 1995
June 2, 1995
June 6, 1995
I
J
K
L
M
N
0
p
Q
�.,
Fe_dState Partnerships Make Taxation Less Taxing
The IRS and state taxing authorities are working together to reduce taxpayer burden,
improve taxpayer service, and minimize tax administration costs. The goal is to
eliminate duplicative tax requirements and to take advantage of economies of scale
in tax administration wherever possible.
Successes
• Joint Electronic Filing -
Through a FedState joint electronic filing program,
taxpayers can satisfy both their federal and state filing requirements with a single
electronic transmission. 29 states participated in joint electronic filing in 199 5, with
more than 1.5 million returns flied. The program will expand to 32 states in 1996.
•
Filing Assistance - The IRS and state tax agencies have worked together to jointly
distribute tax forms and provide taxpayer filing assistance.
• Joint Outreach Programs -
The IRS is working with many states to jointly
provide:
tax counseling for the elderly,
education for new businesses,
education for other targeted taxpayer groups,
tax practitioners' workshops, and
educational publications.
Barriers
·•
Further growth in FedState partnership programs is hampered because the IRS is
currently barred from using appropriated funds to provide services to state agencies,
even if the cost is reimbursed.
•
Because of present disclosure laws, a joint electronic filer must file in duplicate any
tax data that is required by both the IRS and the state; the IRS then must transmit
the second set of data to the state.
Removing Barriers
•
•
To enhance· the growth of FedState partnerships, we are proposing legislation that
would allow the IRS to use appropriated funds for FedState reimbursable projects
and eliminate restrictions on the use of data that is common to both Federal and state
tax returns.
The legislation would serve as a model for states that need legislative changes to
remove their barriers to growth in FedState partnerships. These proposals have been
endorsed by the Federation of Tax Administrators representing all 50 states.
�..
·'
FedState Partnerships
Page 2
The Future
•
Once the legal barriers are removed, the IRS and the states will be able to engage
in countless new cooperative efforts that would make taxation less taxing by:
eliminating the requirement that taxpayers provide the same information to
both the IRS and the state taxing authorities;
allowing taxpayers who make errors in their electronic returns to correct those
errors by working with a single contact point for both Federal and state
purposes;
offering "one-stop service" where taxpayers could call one location and
receive answers to federal, state, and local tax questions;
allowing taxpayers to satisfy their tax obligations by entering into coordinated
installment agreements with the IRS and state taxing agencies; and
paving the way for the development of a single federal/state income tax forrri.
•
The cost of government will be greatly reduced through eliminating duplicative tax
administration efforts and taking full advantage of available economies of scale.
Increased Revenue and Burden Reduction
•
Preliminary Treasury estimates, assuming participation by 20 percent of the states,
show a cumulative benefit by FY 2000 of:
--$1.5 billion reduction in taxpayer burden, and
--$315 million increase in revenues.
�---'
SmaU Business and the Simplified Tax and Wage Reporting System
Vision
o
The two-fold goal is: reduce employers time and expense in filing returns and paying taxes while saving
Federal and state operations costs.
o
This is a voluntary system that:
o
•
SIMPLIFIES LAWS. DEFINITIONS, AND PROCEDURES related to tax and wage reporting
(worker classification, wage components, data definitions, employer identification numbers, filing
procedures and periods, forms and formats)
•
ENABLES AN EMPLOYER TO FILE A SINGLE RETURN ELECTRONICALLY (the
electronic eommerce network will map the data into appropriate formats for sending to
appropriate State and Federal agencies)
•
PROVIDES ENHANCED ASSISTANCE AND SERVICES TO EMPLOYERS FOR EASIER
FILING (SSN number validation, assist employer registration, and employer technical assistance
for tiling information)
When fully implemented, it can save employers up to almost Sl billion annually in tax and wage reporting
costs. Of the approximately 6.2 million employers in the United States, 60 percent have fewer than five
employees; therefore, small businesses, in particular, will benefit noticeably from reduced burdens.
Guidin& Principle&
o
Employers, States and Federal Agencies agree to:
•
•
•
•
•
Maintain the separation between Federal and state governments
Build on existing systems/programs (emphasize compatibility)
Protect employee benefit programs
Not impose additional cost
Protect privacy of participants.
Initial Progress - "Paper W-2 Project"
o
Under" current practices, large employers (over 250 employees) submit magnetic tape containing all
employers W-2 data to the Social Security Administration (SSA) and to the states. Small employers
submit paper W -2 fonns.
�Under the "Paper W-2 Project• begun in 1994, small employers send paper W-2's to SSA. SSA scans the
paper, turns the data over to IRS which, in turn, sends tapes to 29 participating states, compiling the
employer data for each state (see attached). lllinois no longer requires employers to subrrut separate
paper W-2 data; other states cand do this if they choose to.
o
Scope
This will simplify reporting of:
•
•
•
•
Federal and state tax and wage infonnation
State Unemployment Insurance (UI) tax and wage information
UI tax payments
Employer registration
Other Benefits
o
Some of the benefits of the project are:
1)
simpler wage and tax reporting requirements for the business community;
2)
reduced number of contacts employers have with governmental entities;
3)
reduction in employers' reporting costs;
4)
improved accuracy and timeliness of data received- allowing Federal and state agencies to better
administer programs;
·
5)
reduced duplication of effort at Federal and state levels; an~
6)
more efficient and state-of-the-art system (reducing Federal and state operating costs).
Wbat Can Be Accompli!hed In The Short Run?
Under the Treasury Department's leadership:
o
In 1995, the "Paper W-2 Project," has been expandedto 29 states from 12 states in 1994. In 1996, it will
be available nationwide
�o
In 1995, a prototype will be developed and by the end of 1996, employers will be able to submit all major
reports (941, W-2 and state UI reports) electronically. Small employers in participating states will be
able to begin taking ad~ntage of existing networks to file electronically.
o
In 1995, Department of the Treasury and the Department of Labor will complete a detailed analysis of the
.state and Federal Unemployment Insurance programs to simplify them and determine required legislation.
Background
o
The Simplified Tax and Wage Reporting System will reduce red tape and costs to employers- especially
small business- when they provide "W-2 .. tax and wage information.
o
Through one-stop electronic filing, Federal and State governments will speak the same language, and
businesses will spend less time filling out forms and more time creating jobs for Americans.
�PAPER W-2 DEMONSTRATION PROJECT: LIST OF PARTICIPATING STATES
1995
1. ALABAMA
2. ARIZONA
3. CALIFORNIA
4. COLORADO
5. CONNECOCUT
6. DELAWARE
7. IDAHO
8. ILLINOIS
9. INDIANA
lO.KENTUCKY
11. KANSAS
12. LOIDSIANA
13. MAINE
14. MARYLAND
15. MASSACHUSETIS
============================
LIST OF STATFS INTEREsTED IN PARTICIPATING
1. MICIDGAN
2. NORTII DAKOTA
3. WEST VIRGINIA
16. MINNESOTA
17. MISSISSIPPI
18. MISSOURI
19. NEW JERSEY
20. NEW MEXICO
21. NEW YORK
22. NORTH CAROLINA
23. omo
24. OKLAHOMA
PENNSYLVANIA
26. SOUTH CAROLINA
27. UTAH
28. VIRGINIA
29. WISCONSIN
25~
�Q & A FOR SIMPLIFIED TAX AND WAGE REPORTING SYSTEM (STA WRS)
WHAT IS STA WRS?
STA WRS is a joint project of the Department of Treasury, the Internal Revenue Service
(IRS), the Social Security Administration (SSA), the Department of Labor (DOL), the Office
of Management and Budget (OMB), and various State and private organizations. VicePresident Gore's National Performance Review recommended that Treasury assume
responsibility for this project in recommendation TRE05, "Simplify Employer Wage
Reporting." STAWRS ·is also part of the Re-Inventing Government (REGO) II proposals
announced in June 1995.
We pronounce the name of the project as "STARS," keeping the "w" silent. The name of
the project has changed over the past year from the "Wage Reporting Simplification Project"
to STAWRS, but we plan to keep this new name because it captures the idea of reaching
high for ambitious goals.
WHAT IS THE PURPOSE OF STA WRS?
The purpose of the project is to reduce the tax and wage reporting burden of employers
through re-engineering current reporting processes. This project was begun in 1990 as a
suggestion from the business community to IRS to help relieve the reporting burden.
The two major goals of the project are to reduce employers' reporting burden for tax and
wage data and to improve the efficiency and effectiveness of government operations.
In order to accomplish these goals, the three primary objectives of STA WRS are to 1)
harmonize tax and wage codes--e.g., have tax jurisdictions use similar definitions of key
terms: employee, employer, employment and wages; 2) develop single-stop electronic filing
for tax and wage reporting--e.g., have employers and tax agencies use national electronic
commerce networks; and 3) provide employer services for easier data submissions--e.g.,
have employers _yalidate employee social security numbers via PCs or phones.
WHAT ARE TilE EXPECTED BENEFITS OF STAWRS?
The MITRE Corporation estimates that STA WRS could save the federal agencies involved
between $500 million to $1.5 billion (over 15 years) with a benefit to cost ratio ranging from
2.0 to 5.0 depending on the level of functionality chosen and implemented.
However, most of the STA WRS savings are to employers; these savings range from $1.6
billion to $13.5 billion (over 15 years). FTE estimates were not made as part of the MITRE
study; costs were based on time savings through reporting efficiencies. However, electronic
data interchange (EDI) and electronic filing technologies could substitute for paper filings,
reducing the requirements for paper. processing.
�WHAT IS. AN EXAMPLE OF HOW STAWRS MIGHT OPERATE?
As its first demonstration project, STA WRS successfully completed a Paper W-2
demonstration this past tax year. IRS Form W-2 summarizes employees' annual.wages; this
data is currently submitted by employers (with less than 250 employees) to both the Federal
and State governments in paper form. Under this demonstration project, in 1994 12 states
received this data in digital form through a joint effort of SSA and IRS. SSA scanned the
paper returns, and then IRS separated the data by State and forwarded the data to State tax
agencies. This project could eliminate the need for employers to flle W-2 data with states.
The project is being expanded in 1995 to a total of 29 states.
This project demonstrates how wage and tax data can be flled in one location and shared by
other agencies, ultimately reducing the reporting burden for employers.
WHAT ELSE IS STAWRS DOING?
In addition, STAWRS is also developing a model wage legal code. Currently, different tax
authorities use different legal definitions of terms such as "employee, employer, and wages."
The purpose of this part of the project is to develop a model code that "harmonizes" the legal
definitions of these Federal and State terms and develops a uniform calendar for filing dates._
By the end of FY 1995, STAWRS will have policy options for the next steps to be taken for
simplifying employer tax and wage reporting.
WHAT IS STAWRS DOING IN ELECTRONIC FILING OF DATA?
STAWRS is developing "prototypes" of various employer reporting functions to test these
services out on a limited basis and see how they work. In particular, STAWRS is
developing electronic filing tests using electronic data interchange (EDD technology. Many
businesses are already tradmg data over EDI networks, so STA WRS will promote the filing
of tax and wage data with Federal and State agencies by testing these processes with selected
forms and agencies. Electronic filing is cOst-effective for employers and agencies, and
ST AWRS is promoting the filing of various reports such as the IRS' q ua.rterl y withholding
report, the 941 fonn, and the annual report of employee wages, the W-2 fonn, sent to SSA,
. and others.
WHAT KINDS OF PAYMENTS AND DOCUMENTS WOULD BE MANAGED
THROUGH STAWRS AND WHICH AGENCIES WOULD BE INVOLVED? WHAT
KIND OF SERVICES CAN BE EXPECTED TO RECEIVE FROM STA WRS?
At the Federal level, the agencies with employer reporting requirements involved in
STA WRS are the IRS, SSA, and DOL. At the State level, both revenue and employment
·
security agencies are partiCipating.
An example of how STA WRS can operate right now is where 29 State revenue agencies are
�participating in the "Paper W-2 Project," a three-year effort involving IRS, SSA, and 29
States. This project was arranged through the- Federation of Tax Administrators (FT A) and
includes SSA scanning employers' paper returns for State data 'and creating a ftle tape. IRS
receives the State data tape, separates the data, and distributes digital data to the 29 States
which have signed memoranda of understanding (MOUs) with IRS on how to handle and use
·
the data.
Ultimately, the objective is to eliminate the requirement that employers file W-2 data on
paper to State agencies when the States can get the data they need in consolidated, digital
form through SSA and IRS. lllinois has already eliminated the paper filing requirement for
employers in that State, and we hope that other States will be able to do likewise in the near
future.
Looking ahead, there is a wide range of services for employers that are being discussed
through the STA WRS "working group." Primarily, STAWRS is promoting and encouraging
agencies to develop several services such as SSA' s employee social security number
validation service, IRS' electronic forms available through the INTERNET, and States'
combined employer enrollment for revenue and UI agencies (such as Pennsylvania has done).
These are examples of services that benefit employers.
WHO IS SPONSORING THE DEVELOP1\1ENT OF STA WRS?
STAWRS is a joint project of the Department of Treasury, the IRS, the Social Security
Administration (SSA), the Department of Labor, the Office of Management and Budget
(OMB), and various State and private organizations. At the last full "working group"
meeting held in February, 1995, over 100 persons attended who represent Federal and State
agencies as well as the employer community. Major representatives of the employer
community include: the American Payroll Association and the American Society for Payroll
Management.
Without the valuable input of the persons who must comply with the reporting requirements
imposed on them by these government agencies, it would be impossible to know how best to
redesign these reporting systems. Many people have mentioned at these working group
meetings that if STAWRS has accomplished nothing else, it has provided a unique forum for
these groups to discuss their common problems and seek common solutions. Of course, we
hope that STAWRS will accomplish a good deal more than just productive discussions, but
these meetings have been critical for helping to develop the priorities for improving tax and
wage reporting.
WOULD ALL STATES AND ALL TAX AUTHORITIES BE REQUIRED TO
PARTICIPATE---AND REQUIRED BY WHO?
STA WRS is built on the premise of voluntary participation by the parties involved.
One of
the major aspects of STAWRS is to develop cost/benefit studies of the various services that
are being developed in order to know which ones provide the greatest benefit to employers
�and the governments. The development of these services will depend, in large part, on the
kind of evidence that is produced about the benefits deriv,ed from new approaches to tax and
wage reporting and the services being proposed for employers. ·Any efforts to improve the
system will assess first the advantages of new approaches before any recommendations for
adoption by agencies will be made.
WOULD STAWRS SET UP
A NEW
LAYER OF BUREAUCRACY?
We are not creating another agency that will try to duplicate the existing tax and wage
reporting systems. ST AWRS is trying to simplify and facilitate the exchange of information
between employers and agencies, not slow down or impede the current reporting
arrangements. Through electronic filing, we think that it will be possible for employers to
file similar or same data at one time with multiple agencies. Therefore, we are working
toward a single-filing electronic environment, using national electronic commerce networks,
but the data will still be distributed in a timely manner to the existing agencies that require it
In regard to the range of "determinations" about employers, STAWRS is not going to come
between employers and the agencies making those decisions.
ASSUMING STAWRS GETS UP AND RUNNING,.WHAT ENTITY WOULD
ANSWER SPECIFIC QUESTIONS ABOUT VARIOUS miNGS.
At the present time, no determinations have been made about which entities would be
providing which services or functions. We are looking into this matter, but it will be
resolved only after some prototype and pilot efforts have been completed and
recommendations made about which agencies are best positioned strategically to provide
these kinds of services. Right now, we think that there are multiple agencies which could be
considered for providing some of the services that are being proposed. Obviously, this
situation will require careful coordination among· the parties involved, but with current
telecommunication and computing capabilities, we think that many agencies can work
together to provide quality services to employers.
WHAT KIND OF SUPPORT HAS STAWRS RECEIVED FROM THE
ADMINISTRATION AND FROM CONGRESS?
'
The White House endorsed STA WRS on June 9, 1995 as part of the second round of reinventing government initiatives (called REGO II). In addition, STA WRS was endorsed by
Vice-President Gore's first "re-inventing government" report in 1993. Furthermore,
STA WRS has broad support among the Federal agencies involved, IRS, SSA, DOL, OMB,
and Treasury. Each agency is contributing either personnel, budgetary support, or both to
the project. In addition, some congressional offices have been briefed on the project and
offered support for what STAWRS is trying to accomplish. However, of equal importance,
is the fact that many State agencies are also supporting STA WRS because they too have a
significant stake in the success of this effort.
�HOW WOULD STAWRS BE FUNDED ASSUl\1ING IT GETS UP AND RUNNING?
STA WRS is currently funded through the IRS' Tax Systems Modernization program.
However, once the prototypes have been fielded and tested, cost sharing arrangements among
the agencies involved will be addressed. Until questions about the feasibility of. various
services are tested, we will not know how to estimate how costs could ·be determined.
WHAT OPPORTUNITY WOULD EMPLOYERS HAVE TO C01\1MENT ON STAWRS
AND TO HELP RESOLVE PROBLEMS ONCE IT IS UP AND RUNNING?
At every step in the development of STAWRS, the employer community has been involved.
Employer input has been continuously sought through open working group meetings, focus
groups targeting on small employer needs, and site visits to gather data from employer
operations in meeting current reporting requirements. At the present time, all documents
produced on the project have gone through an extensive review process, where Federal and
State agencies and employer representatives have had a chance to read draft proposals and
comment on them.
In the future, a structured approach to getting feedback from employers is being developed to
get comments on services being provided or planned through STA WRS Executive Steering
Committee, a body chaired by Treasury with 2 senior officials each from IRS, SSA, and
DOL.
HOW PEOPLE FIND OUT ABOUT THIS PROJECT?
ST AWRS does distribute information about the project to any person or organization 'that
requests it. The STAWRS number is 1-800-4-STAWRS (1-800-478-2977); the mailing
address is STAWRS-ATC, Internal Revenue Service, 1111 Constitution Ave., NW,
Washington, DC 20224. We are eager to help anyone understand what STA WRS has
accomplished. and what it plans· to achieve in the future.
�Debt Management In The Federal Government
Our Vision
The program has a very clear vision: to protect the rmancial interests of the American
taxpayer; and to treat delinquent debtors fairly while collecting what is rightfully due.
Background
•
In September 1993, the National Performance Review Report highlighted the need to
strengthen how the Government collects its delinquent debt. The report noted three
issues: (1) Federal agencies did not have the resources to invest in debt collection,
(2) their mission did not include debt collection, and (3) they faced too many
restrictions in using the available tools.
•
On March 22, 1995 the President's Council on Integrity and Efficiency, which is
composed of the Inspectors General, reported on the need for a Government-wide
system of offset and agency gainsharing. In 1993, as reported to Congress in the
Administration's Financial Management Status Report and Five Year Plan, the amount
of past due non-tax debt was $44 billion-- or 19% of the total debt. In 1994, the
amount of past due Federal non-tax debt has increaSed to almost $50 billion -- or 21%
of the total debt. This means that one in five non-tax dollars owed us is not being
repaid us in a timely fashion.
•
When past due Federal income taxes are added, the total past due jumps to $107
billion in 1993, and to $117 billion in 1994. The projected amount for 1995 is
$125 billion.
•
Since September 1993, Department of the Treasury officials have talked to over 800
Federal employees involved in collecting delinquent debt about the barriers they face
in doing their jobs effectively and about ways to remove those barriers.
Overwhelmingly, they support initiatives which will improve their ability to share
information with each other, to standardize and centralize debt management functions,
and to strengthen debt collection regulations.
•
Consequently, as a follow-on to the NPR report and the work of Treasury Department
and agency officials, an expanded program is being created to strengthen and enhance
debt collection within the Federal Government.
�~~-~---~----------------------------------
Our Goals
Our goals are simple:
•
•
•
•
•
•
•
reduce our losses;
treat our debtors fairly and consistently;
maximize the amount we collect and minimize our costs to collect;
ensure that the public knows what we are doing and of their obligation
Government debts;
avoid needless lawsuits;
ensure that our employees are properly trained to do their jobs; and
use private sector resources.
to repay
Every Federal agency has the responsibility to: (1) implement effective debt collection
programs; (2) streamline debt collection processes; (3) be able to share information; and (4)
use modem business practices and technology.
St.Jccesses
•
Debt Collection Centers - The following agencies currently have debt collection
centers -- the Small Business Administration and the Departments of Veterans
Affairs, Education, Housing and Urban Development and Treasury.
•
Tax Refund Offset Program -- Treasury has collected over $4 billion in delinquent
debt through the offset of Federal tax refunds.
Barriers
•
Debt collection is not a priority in Federal agencies.
•
There is no centralized program to offset Federal payments (non-tax) for delinquent
Federal debt.
The Legislative Proposal
We are sending legislation to the Hill to support this program. The legislative proposal:
•
protects the rights of the debtor, and provides notice and due process, before the debt
is collected;
•
enhances our ability to collect from those people who owe money to the Federal
Government;
•
provides a mechanism for the Government to stop paying people who are past due on
amounts they owe the Government;
�..----------------
•
expands the authority for Federal agencies to service and collect debts for each other,
so that agencies do not duplicate collection programs;
•
allows more Federal agencies to use private debt colleCtors;
•
expands the use of private attorneys to help collect Federal debts; and
•
streamlines the judicial foreclosure system.
Anticipated Benefits- One Year From Now
This proposed legislation will provide the following benefits:
•
Increased revenue of $.9 billion to $1.1 billion over five years.
•
Reduction of the Federal deficit.
•
Reduced delinquencies.
•
Debt referred to debt collection centers by program agencies.
•
Less restrictions for agencies using contractors to participate in the Treasury Offset
Program.
•
Consistent and fair treatment of delinquent debtors.
•
Dividends will be given to Federal agencies doing a good job of debt collection.
Who are the stakeholders?
•
Federal program agencies
•
Federal Credit Policy Working Group
•
Treasury -- Financial Management Service and Internal Revenue Service
Our Commitment
This new program demonstrates our commitment to changing the way the Government does
business and protecting the interest of the American taxpayer. Most debts in the private
sector -- 95% -- are paid on time; only 1 or 2% ever become seriously past due and require
enforcement action to collect. The Federal Government cares about collecting its debts and
is going to take serious steps to ensure that we are repaid in a timely manner. We owe it to
the people who work hard to pay their debts on time.
June 6, 1995
�·'I
'.
~·
DEPARTMENT OF THE TREASURY
. INTERNAL REVENUE SERVICE
/"?.__
/
WASHINGTON, D.C. 20224
APR I I 1995
CHIEF MANAGEMENT
AND ADMINISTRATION
MEMORANDUM FOR LESLIE B.
ASSISTANT ~~ri:...J.
FROM:
David
Chief
SUBJECT:
IRS Proposal for Joint Federal/State Tax
Agreements
On January 10, the Commissioner forwarded for your
consideration a package of legislative proposals with the theme
of reducing taxpayer burden ~nd increasing administrative
efficiency.
Included in that package was a proposal to enhance
cooperative agreements with state tax authorities.
As you may be
aware, both the Treasury Department and OMB consider expansion of
these cooperative agreements as an important vehicle to
successfully meeting the goals of the National Performance
Review II (NPRII).
During subsequent conversations with your staff, it was
suggested that the Congress may use H.R. 3419, introduced in the
103rd Congress, as a starting point for a new simplification bill
and, therefore, that the IRS should consider what amendments it
needs to the cooperative agreements provision in that bill.
While we would prefer the proposal in our January 10 memorandum
because it addresses several additiori~l issues, we are providing
another·proposal that describes the changes we would like to have
made to the provision in H.R. 3419, should that provision be
reintroduced.
This additional proposal recommends three changes to the
H.R. 3419 provision:
1.
Making sure that the legislation introduced proyides
for joint tax administration agreements that include
those relating to Federal income taxes as well as other
taxes;
2.
Section 6103 of the Internal Revenue Code of 1986 (the
"Code") is to be amended to ensure that common data
filed with th~ IRS under a joint filing program to meet
. both state and federal tax requirements is not
classified as federal tax information pursuant to such
section; and
r: , :..
�-2-
Leslie B. Samuels
3.
Section 7431 of the Code is to be amended to pr9.vide
that state employees performing federal work under a
joint tax agreement be accorded the same protections
from taxpayer civil suits as federal employees, and be
subject to the same criminal sanctions as federal
employees.
Once your staff has had the opportunity to review this
proposal, we would like to explore our options and potential
legislative vehicles with them.
A copy of both proposals is
attached.
Attachments (2)
�COOPERATIVE AGREEMENTS
PROPOSAL
If legislation is reintroduced in this Congress, and such legislation
is similar to that contained in H.R. 3419 introduced in the last
Congress, the following three changes are recommended:
1. Any restriction limiting potential joint collection
activities to taxes other than income taxes be
eliminated. Any such restriction must be eliminated so
that we may explore activities such as joint installment
agreements.
2. Section 6103 of the Internal Revenue Code of 1986
(the "Code) be amended to ensure that common data
filed with the IRS under a federal-state joint filing
program to meet both state and federal tax
requirements is not classified as federal tax information
pursuant to such section. This amendment will allow
states to use common federal-state data received from
the IRS under a joint filing program consistent with
state confidentiality laws.
3. Conforming amendments to section 7431 of the Code as well as
language in the legislative history be added to provide that state
employees performing federal work pursuant to a joint collection
agreement receive the same protection as federal employees from
civil taxpayer lawsuits for the knowing, reckless, or negligent
disclosure of returns or return information. In addition, such state
employees· should also be subject to the same criminal sanctions as
federal employees.
�,.
J?r·····
.
/·.
.
.
.
.
PRESENT LAW
Under current law, the IRS is generally not authorized to use funds
appropriated for federal tax administration to provide services to
non-federal agencies even if the cost is reimbursed (62 Camp. Gen
323,335 (1983)). In addition, under current law, the IRS is limited
in its ability to enter into effective federal-state joint return filing
projects due to the disclosure restrictions of section 6103 of the
Code.
REASONS FOR CHANGE
. H.R. 3419 had provided that the Internal Revenue Service be
allowed to use funds appropriated for federal tax administration on
joint reimbursable projects with the states. The proposal also
allowed for a number of possible cooperative efforts such as the
joint collection of taxes.
The IRS' Strategic Business Plan lists greater fed/state cooperation
as important to the future of the IRS because it allows for greater
efficiencies in the use of tax administration resources. However,
section 821, Cooperative Agreements, of H.R. 3419 included a
parenthetical that should have been eliminated because of the
restrictions it would have imposed on IRS plans for greater federal
and state cooperation. The parenthetical would have restricted joint
collection activities to taxes "other than federal income taxes.· ..
This restriction would limit joint collection activity to excise or
unemployment taxes which are only a portion of all collection
accounts.
·Data common to both federal and state tax returns which are
proce~sed by IRS under a joint filing program is protected by
section 6103 of the Code, even though it would not be so protected
if the state gathered the data directly from its citizens. A literal
application of section 6103 of the Code will, therefore,
inadvertently restrict .the use states can make of their own tax
information which is processed by the IRS under joint federal-state
2
�filing programs. A technical change is needed to amend section
6103 of the Code to ensure that information filed with the IRS
under a federal-state joint filing program to meet both state and
Federal tax requirements is not classified as federal tax information
under section 6103 of the Code. This will allow states to use· . ·
common Federal-state data received from the IRS under a joint
filing program consistent with state tax confidentiality laws.
Currently, the IRS has a pilot project with a number of states to
allow taxpayers to file both their federal and state returns
electronically with the IRS. Without amending section 6103 of the
Code, the IRS must act as a conduit for state tax information in this
joint filing program by requiring electronic. filers to duplicate tax
data required by th(! state, even though it may be the same as
federal information. The IRS then strips the state data off onto
another tape and sends it to the state. Such duplication increases
costs for everyone.·
Changes to section 7431 of the Code are deemed necessary in order to
afford protection to state employees who, under a joint collection
agreement, perform federal work. Such employees should be afforded
the same protections from taxpayer civil suits as are federal workers
performing the same work. Conversely, while being afforded the same
protections as federal workers, state employees performing federal work
should also be subject to the same criminal sanctions as federal
employees who are similarly situated.
SUGGESTEDSTATUTORYLANGUAGE
Based upon the statutory language of H.R. 3419, the following statutory
language changes are suggested:
(1) Section 821(a) of H.R. 3419 is amended by striking the
parenthetical in proposed section 7524(a)(3) following the phrase "joint
collection of taxes".
(2) Section 6103(d) is amended by adding at the end thereof a new
paragraph (5} as follows:
3
�(5) Information obtained pursuant 'to joint tax
. return filing program: Notwithstanding
paragraphs(!) and (2) of subsection (b), the terms
"return" and "return information" shall not include
common data obtained by any State agency, body or
commission pursuant to a joint tax return filing
program entered into under section [section of Title 26
adding the joint filing program]. However, such
common data is subject to subsection (p)(8) of this
section. For purposes of this paragraph, "common
data" means any item of information that is required by
both Federal and State law to be attached to or
included on the respective Federal and State tax
returns.
(3) Section 743l(a)(l) is amended by adding after "If any officer or
employee of the United States" the language "or any state employee who
is authorized to administer Federal tax laws pursuant to an agreement
authorized by section 7524.
Terri Bearman
M:L
March 28, 1995
4
�PROPOS~-
r
E2.ac: 2. nev sec"Lion of the IRC co 2.llow Lhe Sc:cre~ary and state t2..X auc.horicies co c:1ter mto
ca.'C ::.c::n.ir.is;::-::.;:icn J.gr~!:8e2.CS. E::.ct-, :.ge:1cy col!ld. pay c:::ch. ocher for se:-vic::s <enc.ereo..
=~:~-:=:- c:: ·::. ;'=:- 5c:-,:i:: b2.5is c~ o:-:. 2. ::'~:-:c:::c::.g.: of ~..:r:C5 cJite:~ed.
Conior.:-...:.:.-:g ::.me:-:C.:n-::nts ar:: ne-::d.ed cO (l) ame:1d IRC sec~ioi1 6103 (Disc~osi.!.-:: ~rovisions),
·o ~=-'-~
=--:·~----,
.. :.,,_:_co=
·o
\"Or'-~_.,c, -=-"--..11'-;.l
~cr_.,,..,"'nts . (-)
·o .,_,..,a·
IRC
(.')
L
l·.. C.L_. '~"' :::nu
..;..l.1J..I..::
1 l·.,.,r:o,....,-,-c;on
L~.:..:.~.
L
v r.... l.:._.__.._
~
L
c.u.... -....
section 6<lQ2 co oermit
a£Te!:::r:e:1cs
co offse~ feder:ll refunds lO oav
w
..
.. . state liaoili~ies. ar..d (L!.)
'
c:arify ct::::.~ s<:::.te -:::nployees pe:Lormmg federal •.vork are sub_iec;: to the sCiffie re~urre:-nents as
fede::-al e:L:.ployees.
C u.rre ::.c i.:.J.ce rc.c :ion
..a.
J....l..!.
U..!'-
be~we!::J.
F ede::-2-l ar:d Scare t2Xillg 2.2:e:1Cles is gener2.lly li.rr.i ced co
exchanges of informacion (tape matches. sharing of examination results ecc.) a::1ci. joim
educ2.tion efforu. Ou.'1e::-s exchanges are nor possibie under ?resent lc.w. Under law, che::e ts
no aooro~riacion aumoriry to perform work for e3.ch ocher or to pay e:1ch oc.he:- for Lhat work.
REASONS FOR CH..ANGE
To.e pili-pose of chis legi...slarion is to reduce the burde::1 on me public as well as on cax
agencies, co improve me ·efficiency of tax admini.strarion ac all levels by becrer- utilizing
availabLe resources. and to mc:-e2..Se the colle::tion of delin~ue-nt federal and s.:ace C.2.xes.
E?::-;::-CT OF PROPOSAL
T~is ;::ro~os2.l
h::.s che ;:;oce::cial r"or signir!c:mcost savings. burde:1 reduccion. c.rrd would al:::o
provide Lb.e me:::.ns by which we c:m suooort the goals of che ~acionai Perforll":c.nc~ Review
a.ud ;::::;:]_\JVe towards reinventing government.
PRIOR CONSIDERATION
PreYiousiy, a less comprebensive prov1slOO. regarding u'l.e use of coopera.tive agreemencs wich
scate cz.;;: auti:::.oricies was included in section 821 of H.R. j..:L9, me Tax Slm.piificacion c.nd
Tec!:-..rllc::J C:::n-roe~:ions Ac:- of 199<!. u.'"lac was passed by the House on May L7, L99.::!., bm not
considered by the Senate.
.)
�Subtitle C--A. urhority for Certain
Cooperative Agreements
SEC. 321 COOPE:R.~ TT\T .-\GREE\rE::\T \YTTH STATE T.1.X AlTHORITrES.
(:;.) I:.: G:::~E?...l..L.--C~::.-~JCe::- 77 of Subcicle F (reL:.ting
-rr-o~c·. ._......
~,..;
~-!.·-·-
0''
~~
~Q·Q·ina
r...;.
.. .;.l=
-:...,
'..;.!.._
~vis-;-a
[._,"~""[-·\. ... L!..:..:= '"'rov;-;ons
~
l.:::L
l
.:. • ._ .. .._.....;
·o
.,...... l_,,
..
L
... ._ •'"
[0
misc::~l::.cre8us ?rovis~ons) ts
·'
-'u;...c:..--("'~
u u.:..!-' ...... ~--
-"·'--- bv l !1'",..,.
na
_.._ .. Ll .....
=
ur:e:- r1e'.'/ Subcha..vce::- A che fcllO\v·ir.q- ne'.'i ~:.lbc::c.Dt~::-:
-
"Subchapter B--Joim Collec.ion and Administration Of Ta.\':es
Sc-:. 7 52~. Tax administration agree:Tie:1.c.s.
Se-:. 7525. Rezulc.cions .
.. SEC. 752~. T.~'\: _..\.D:V0.?'i1STRATION AGREE::\·lli~"TS.
"(a) GE:~E:?....:...L.--Tn.e Sc-::-e2r:r is he:eby autb.orized. [0 e:lte::- t.GCO tax
c.drn.inisrration agr-ee::ne:JIS with any State age:1cy, body, or commission descLibed in
se-:tion 6103(d)(l). For the purpose of im:ple::nenring an agreemem. the Secretasy is
c..m.b.orized to permit: office:-s and employees of such State agency, body, or
commission to exercise powers rdacing to the administration and. en..forcemem of this
cide if the officers and em~loyees are under the ge:;.eral supervision of the Secretary.
Any determination by officers and er12ployees of a State. acting pursumt m such an
ag:-eeme:1.t. shc..ll be pri_rna facie good and rufficie:.c for all leg:J purposes.
·· (b~' T.-\X AD:'v[i:\IS7iZ..:. . T:c~ .-\G~~:-·~=~T D~.:=::~E:J-- _-\ ~2-x ?..d.rz:!..r-..is;:rc.tior..
2.g-reemem is a wrirrcn agreement for (he joim or re-:~procal exe::-cise cr" t;:J.X
administration powers that is encered. imo be!:Ween. the Secre~ and a State age:1.cy,
body, or commission described in section 6~03(d)(l). E::.ch Fede:-al or State t2...X.
2.drninist:ration. power to be exercised purma.m to a t2..X adminiSU"2.tioc. agr-ee::nem shall
be performed. in c.c::ordE-l!ce wicb. the (e:W.S of the c..g:reemem to the e;crem suc2. terms
do not conr1ict with the Fede:il or Sc:at:e taws that: otherwise c.mb.orize tb.e resnecrive
t2.X a~isu.-ation function. Sucb. agreeme:J.CS may provide for jai..uc or reciproc3..1
administration of the following t2.X f:..::J.ctions:
" ( i) f!li.ng of Federc.l and S tc..te
t2.X. r'!!:llrns,
"(...,)
.. ,s;,.,o.,,,.....,.,
-,.,a· -..
:u,...,...,
.:... proc -&...1..1: oc- -..
L .......
~J..J.-J c::....L.L'--.
'-~
.I
;.,..,r=orm~·ion
~
.1 C.\....
a
�''(3)
coll~-:rion or· cax.=s \ir:ciuci~~cz buc nee l[m[(d w f-::·2:::-J.l ZHl.ci..-ot
Scac~ tr.com~
taxes;,
"(~) processi..r1g or· payme;:Ls re-:~:ved t"rom caxpaye:-s.
"(5) sharing of adminisu-c.cive resources,
"(c) JuorC:AL PRoc::::::urNGS.--
"(1) R.EvlEW BY TEE i..JN1TE:J Sl'.\TC:5 COl'"R.TS.-- :'-iothi;:g m ~h1s
subchapce~ shail give any cour1 of Lb.e Unic::d Scaces any c;.ddicic~3.l
jurisdicriori nor diminish [cs jur1sd.ic:ion.
"(2) PROEIB[TiON OF RE--!TEW 3Y Tn::: Sl'AT=: COLr:r~s.-- ~o
caur1 or oche~ tribl!nal of any Sca.ce chat [s a parry to a cax .
c.drninisuacion ag:reem.eac e:1ce::-ed. inco pursuant co Lhis subcha;;~e::- shail
have jurisdic:::ion co hear any acrion. leg=.l or equie2.oie. with respect co
any ince:nal revenue cax: of the Cruce::i. States mac is Lb.e s<.loje-:: of such
agreemenc. Nor snail any such couu: or criouna!. acquire jurisG.~ccioo.
over an individual who exercises federal tax adminisuatioo. powe:::s
pursuant to a taX adminisrracioo. agreement for actions reiating to the
exercise of those powers.
~(d) PATh{EYf FOR SERVTC::s.- The Secre2ry is authorized. to pay reasonable
cowpensation on a per-service basis or on the basis of a perce:1sge o::· i:he amoum
colkc:::ed. for ac~ivicies cor.ducce::i by a Scace ::;l!r5u2.c:C cc 3.n 2.g::-ee:r..e~~ =~cered !mo
pursuam to subsection (a). Tne Sc-:re2ry is c.mhorize::i co colle:: fees 2.nd
reimbursemenr.s for activities conducted by i...i:J.e Uriced. Scaces ou~uam co an a2:reexe:;.t
emered into pursuant to subsection (a).
~(e) AVAIL-\BIT..ITY OF FUNDS.-- Any funds a'9propriaced for pt..:.rposes of c.b.e
administration of this cide shill oe avc.ilao[e for purposes or C2.IT)'llg Out che
Sec~era.ry's respoo.siliiliries under m agreement c:me:::eri inca uncier subsecrion (a) or
(b). Any fees 2..1'1d reimbursements received. purSlUlt: ;:o sueD. 2.0. ag!'ee::nenc 5hail be
c:-ed.ited to the amounr.s so appropriated and.. sn2ll ~e:nain available m the Internal
Revenue Service until expended m supplement appropriations made c.vaiia.ble co tile
aoorooriacioo.s accounr.s in L';.e fiscal ye:_r d.c.....-ing 'vb..icb. ili.is ~revision :s enacted 2.nci.
c.U tl.sc:.l ye3.rs ~he~eafter.
(
�.. (f) T."-.\ T?,=:.!.T!C:S ."'.:\'D OTHE:?. [:.'TC::Z~A Tim..' ..J..L ..~.c~~:::::.l:::.:.I"L.':. --To ci-.e et::l:
or" chis subc:,a~cer or an agree:ne:1c e:1ce:::-e::i inca pur~J.nc c:o :his
way conllic \viu.'-1 c.he cerms of any ca.x cre::cy, or oche~ ince::-r:2.cionai
ag;:-ee:ner_~ of che Uniced. Scaces concaining provisio:1s relacing co ca.xa~ion or c.he
c.d.minisuat:.ion of ca..x: laws, c.he terms of c.he rre:?.cy or mcem..:'.cioml agree:r:.e::.c will
cf1_c:
~rovisions
suoc~apcer
C0
r: !:YO l.
'\g)
T:::?~'.fi\'.!,::c:-< o~ _4..c~:::::::.n:::~<T.--:\-oc'.:.·i~hsc::.·,:C.~:-:g
c.gr-ee:71em. che Sc-::-e~c.r:: re~ains che righc co ~escinci
e::-.~e:-eC. inco uncie::- che a11choricy of chis subcnapcer.
c:::: ce:-::-,s c~ ::-.e
or ce:-minr:.ce any c.g!'ee:ue:-:c
''(h) E~,[PLOY"E::: ST . l.TUS.--Federal Employees accing pursuam co
e :-~ce ::-e::i imo pursuam
[Q
chis subchaocer snall be ciee:nei
[Q
c.n c..<zree:Lle:lc
re:nain fece::-c..l
e:n~ loyees.
"SEC. 7525. REGL"LATIONS.
"Tne Se-:recary or his cielegace shall pre.scribe suci rezulacions ur:cie:c~-:~s cicle as IT'.ay be ne:::essa....-y or appropriate co impleme:1c a;ree:ne::cs
2.L~iliorized. by section 7524.
n
Co)
CONFOR..\1LN'G .A.:.\1ENDME:.'ITS.-(1) Section 6103(d)(l) is amended by scriking the present section and inserting
me following:
"(l)(A) 1.'-l' GENC:'!ZAL.-Rerurns and rerum information wic.h respect to caxes
·-• b ycapte.S
h
,.- 1· l •6'
'?"' ~~ ~1 _::;_
~~ ....
~ )
-l, ) --~. a ~i ld SUOC._apc.....
• :,
luu!OSeG
, 11 , 1'?-·-/1 ,_:;,_....,.,::;
D or cb.a\?tcr 36, sha!i be open co :r:spe:~ion by, or dtsdosur.e co. any Scace age:-;.c:y.
ood.y, or coi:Tilll.ission. or its legal re~resentative, wh.ic::: is charg~d u~d.er the laws or'
sw.ch Scace wim rb.~ re.:l-ponsibilicy for the adminiscracion of Stare ta.."C laws for the
pu..."'?ose of, and only to the extem ne:essary in:
·ci) the adminisrration of such laws, including any procedures wic.h
respect to loc::.ci.ng any person who may. be emided. to a refund; or
(ii) the administration of Feder21.· c.ax laws .oursuanc co a t2.X
administration agreemeni: emered imo becwee:1 saci::J.. a.g~ncy, body or
commission and the Se:reo:.a.ry under section 752~.
.::>r
\
(B) WRITrE~ REQUEST BY AGE~CY HE..AJJ R£.QU1RED FOR DlSC!...OSURE.-- The
i..rtspec~ion of remus c..nd. reu.;m informacion unde:- c.ci.s ;>aragrapi::J. sball be perninei .
.):- iis.:.losure of such rerums Cild re::t:Q informaci.c.u. ::Jc.d.e. only upon wTia:en re~.u~sc
by c.he b.e2.d of sucb. .:.gerrcy, body, or comrnission. c.ud. only to che representatives of
suctl agency, body. or COtillil!.S3lOn designated. in such W'Tinea request c..s l.b.e
6
�individuals who are co insvect or receive the L"eruws or rect!ril infor:7:2..L:on on be~.alf
of such agency, body, or commission.
(C) PE~Y!ISSrBLE RECIPlENTS.--The represencacives of suer. ag~:J.cy, body, or
coOJ..!Dission to whom disclosure is permicred. under Lh.is paragrc.pt shc.U include ooly
e~ployees or legal represe~t2.tives of such ager!cy, body, or corn..mission: or c. oe:-son
desczioed. in subsec:ion. (n.) of this section. However, nOC\l.:icll.SLC..~cili:g tile foregoing,
dis.::~osure sh;.il r:cc be ~e:-;::irced. m any i:::.C.~·.·iciuc..l \-;.:[""o is ,;;..:: c::.1e: e:~e:::.:.ci·:e o~f::e::
of sucb. Scace.
(D) CONFillENTLA.L L.~FO~'v[A.NTS; Lvl?.~'vlENT OF !NVcSTIG.-\T~O~S.--Rerum
iniorro.acion shall not be disclosed under this paragraph co cbe e:cce~c c.:.'"lat che Secretary
de:e::m.ir:!.es mac such disclosure would ide~cify a corul.de::J.tial infoETiai:.~ or seriously
k-:rrpai..r any civil or c~..m.i.nal c.ax investig:.cion."
(2) Se-:~ion 6103(d) is ame::J.ded by adding a~ the er1d cher.eof .::. neo.v paragr-2.~~
(5) as follows:
"(5) INFO~'v(A.TION OBT.-\..INED PlTR.SUA.!'IT TO JOINT TAX RETL?~'i 2LI:---iG
P:ZOGRA.I.'vL- Nocw"ir.b..sc.anding paragraphs (1) and. (2) of subsection (b), u.'J.e
te:m..s "rerum" and "rerum information" shall noc include com..J:D.on d::.s
ooc.ained by any State agency, body or commission pursuarrt LO a joffi~ c.3..X
rellirn filing progrc.m emered. imo under se:::tion 7524. However, sucJ..
common data is subject to subsection (p)(8) of this section. For purposes of
this paragraph. "common .data" me:3.Il.5 any item of informacion that is required
by both Federal and State law to be aa.ached to or included on the respective
Federal and Stare tc.X. rerurn.s."
(3) Section 6103(p)(3)(A) is ame~d.ed. by inse::"ring "(d.)," a.fce:- "subse::ions
(c), ...
(4) Section 6103(p)(3)(C)(i) is amended by srri.lcing "(d),".
(~) Se-:tion 6402
is amended by adding ar tb.e e~d cbereof the foilowing new
suiJse:::tion:
"U) COL!..EciTON OF StATE TAX LlABrr..ITES.-Tne Secre2r)' is auchorized. co
presc.-ioe regt..!.lations providing for the credit or refund of an overpaymem of c.b.e L.a..~
of any State that is a parry to an agree!Ileut emered. into pursuant co suoci:lapcer B of
c!J.a:pter 77. The regulations prescnoed. under this suiJse-:tion may provide for me
reduction of che ove:-paymem of any State ta.x or cax imposed. by Lflls ride by cb.e
c..mount of any l.iabiliry in respec: to 2. State ta..'C or c.. t2.X imposed. by this tide. Tr..e
2..IIi.Ount of any ove:payment of tax imposed. by this tide to ce ::.pplied to a c:.x of a
State shall be flrsc reduced. by my reduction author...zed "uy subsec:ions (c) and (d)."
I
�(6) Se::;:ion "7~3l(a)(l) is <Uuended by adding aft~!:" "If a:ly office!:" or ern~ioye~
of Lf-Ie Ucited States" the language "or any sc.ate employee who is c..urborizeci co c.ci.i11i..r.L.Isce~
Federal t2..."( laws pursuant to an agree::nem authorized by section 7521.,".
(7) Se::rion 7.132(a) is amended by adding after "If any office::- or employee of
the I.nte~2...l Reve!lue Service" che lang'Jage ", or any srate employee wb.o is a1.2.thorized to
re!e:.se lie::::!..S unde::- se::~icr.. 6:325 pursuant to an agreement authorized by sec;:ion 7521.,".
(8) Se::~ion 7.133(a) is amended by adding afcer "If. in conne:::ioiJ. wH.h any
coUec:~ion of F:::derai" Ta.:c wich respect co a taxpayer, any orrl.ce:: or em~loyee of the Internal
Re·1er:me Service" t.he language ", or any src.ce employee who is aur.b.orized.. to co lle::;: Feder2.l
taxes purs-uam to an ag-reeme::tt c.uchorized by section 7524, ".
(9) Section 72l:?.(a) is ame:J.ded by adding arrer "any orrl.cer or employee of
rhe United. States" in both ~laces it a99ears che language ", or any scare employee who is
authorized to administer Federal c.ax laws pursuant w an agr-eement authorize2. by section
752.1, ., .
(10) Section 721.C.(a) is amended by adding a:fler "Any officer or employee of
che Uniced Scates" che language ",or any s~ce employee wb.o is amb.orized m adm.iniscer
Federal ta..x laws pursuant co an agree::nem aut:horized by section 7524,".
(11) Section 7214(b) is amended by adding after " ..C...Oy internal revenue officer
or employee" che language ",or any sc.ace employee who is authorized to a<imir:iist:er. Federal
t2.X
laws pursuant: to an
agr-ee~em
authorized by section 7524, ".
(c) CLE..":UCAL AME.:.'IDME.:."'IT.- The table of sections for Chc.9cer 77 is amended by
adding before the items presently included cherein the following new heading:
"Subchapter A--~Uscellaneous Provisions"
2.nd by including after the icems presemly included c.b.erei..c. c.b.e following:
"Subchapter B--Joint Collection and Administration Of Taxes
"Sec. 7524. Tax
admini~crc.cion
2.g!"ee::ne::lts.
Se::. 7525. Regulations."
8
�No. 6364
Jun. !. 1995 · 4:46PM
P. 2/12
~I
MEM:ORANDUM OF UNDERSTANDING
AMONOTHE
U.S. DEPARTMENT OF THE TREASURY,
U.S. SOCIAL SECURITY ADMINISTRATION
AND
U.S. DEPARTMENT OF LABOR
BACKGROUND
The Internal Revenue Service (IRS) in the Department of the Treasury, the Social Security
Administration (SSA) , and the Department of Labor are each participating in a project to .
identify and punue ways to improve the nation's tax and wage
reportiJl& system. The project
is known as the Simplified Tax and Wage Reporting System (STAWRS).
The objective of each agency's participation in STAWRS is to reduce the tax and wage
reporting burden on employers while improving the efficiency and effectiveness of each
iiency•s operations. This objective is beine pursued by: 1) explorin& the feasibJHty of,~
making, a variety of tax and wage reporting services available to employers and partidpatin&
taX
entities, as approp~, and 2) developin& a hannonized wage code which will brin& into
agreement the Fedezal and State definitions of wages and other terms, due dates, forms and
reporting formats relatine to wage and tax reporting (to the extent practical), and the
employer identification numbering system.
Vice President Gore's National Performance Review (NPR) recommended pursuing this
initiative in the September'7, 1993 Report, •From Red Tape to Results, Crcatin& a ·
Government that Works Better&. Costs Less.• The NPR included STAWRS in two
recommendation£: TREOS, .•simplify Employer Wage Reportine, ·and ITOS, •Provide
lnterEovernmental Tax Filin&, Reportin,, and Payments Processfn&. •
�Jun. 1. 1995
No.6364
4:46PM
P. 3/12
PURPOSE
The purpose of this Memorandum of Understanding (MOU) is to formally establlih an
~eement
among the Secretary of the·Tr;:asury, the Commissioner of Social Security, and
the Secretary of Labor to pursue the· common &oal of reducine the tn and wage reportinl
burden on employers while improvin& the effectiveness of each agency' 1 operations thro~h
STAWRS. ·This common goal is a matter of importance to each agency' a miuion. The
efforts of these agencies will be coordinated by an Executive Steering Committee which is
being created to provide a mechanism by which the three participating agencies may provide
generu policy guidance for the project.
FSTABUSHMENT OF BXBCUTIVE STEERING COMMITIEE
A.
The Commissioner of the IRS; the Commissioner- of Social Security, and the Deputy
Secretary of Labor will each designate two individuals from their respective agencies to
serve· as voting members of the Executive Steering Committee, with other members of
the Executive Steering Committee bein& added as necessary. The Office of
Management and Budget will ~ invited to designate one representative to participate on
the Executive Steering Committee on a non-voting basis. The desipations will be
made within 30 days of the signin' of this agreement. In addition, the Department of
the Treasury's Anistant Secretary for Management will be a member of and the
chairperson of the Executive Steering Committee.
B.
The Department of the Treasury's AssiStant. Secretary for Mana&ement will designate a
full-time Executive-ln-cbar&e of the STAWRS Project. The Executive-In-Oarge will
sezve a.s a non-voting, ex-officio member of the STAWRS Executive Stcc:rin&
Committee.
C.
The Executive Steerine Committee will convene within 45 daya of the sianinl of this
agreemenL
2
�Jun. I. 1995
D.
No. 6364
4:47PM
P. 4/12
The members of the Executive Steering Committee will represent thcir respedive
agencies on the St.ecing Committee in providin' 'eneral guidance and direction,
resolvin' issues, and making recommendations regardin' the STAWRS Project through
the Executive-In-charge, with advice and recommendations from stakelloldels,
including individuals from States, State and Pede.rnl Government orpnitations,
employers, employer orpnizations, labor organizations, employees, priVaCy advocates,
and the public, as appropriate.
E.
The members of the Executive Steering Committee will each pursue participation in the
STAWRS Project by all stakeholders to address issues concem.ing STAWRS' &COpe,
funding, functionality, transition strategy, organizational structure, eovemance,
operations, and other related STAWRS topics.
F.
The members of the Executive St.c:ering Committee will perlodically review and
evaluate the overall·proeress being made in aecomplishinz the STAWRS' objectives, in
particular, from the pcnpcctive of each's respective agency and a.ssnciatrxt atak:cboldcls.
0.
The Executive Steering Commi~ will make recommendations m the respective agency
officials, with the chaiiperson--votine only where necessary to achieve a ~ority, and
all meetings will be documented.
H.
Based on recommendations from the Executive Steering Committee, subsequent
MOU(s) and/or interagency agreements may be developed and cntetcd into, as
appropriate, between the Commissioner of the IRS, the Commissioner of Social
Security, and the Deputy Secretary of Labor regardine issues such as organi"'tional
structure, governance, operations and funding of STAWRS.
3
�Jun. 1. 1YY~
No. 6364
4: 4'1 PM
P.
~/12
AUTHORITIES
(1)
Title 42 of the United States Code aJ.S.C.) Under Title XI of the Social Security
Act, the Secretary of the Treasury and the Secretary of Labor make the necessary rules
and regulations for the efficient administration of the functions with which each
~cy
is charged under the Social Security Act (42 U.S.C. 1302). Undet' Tit!Cs U and
vn of
· the Social Security Act, the Commiuiqner of Social Security is authorized to prescribe
such rules and regulations as the Commissioner determines neceswy
or appropriate to
carry out SSA's functions and may establish such procedures as the CommWioner
determines necessary and appropriate to carry out the provisions of Title II
(42 U. S. C. 405(a) and 902(a)(S)).
Title n of the Social Security Act authorizes the Secretary of the Treamry and the
Commissioner of Social Security to enter into an agreement to process
tax. information
under a Combined.Annual Wage Reportin& System (42 U.S.C. 432). The law
authorizes the Secretary of the Treasury and the Commissioner of Social Security to
modify or change the manner of such processing by mutual agreement.
The Commissioner of Social Security also must establish and maintain records of the
amounts of each individual's earnin's from employment and self-employment and the
periods in which such amounts
(2)
were earned (42 U. S. C. 40S(c)(2)(A)).
Title 31 of the U.S.C. Tbe Secretary of the Treasury has responsibility for preparing
plans for improving and managing reCeipts of the United States Oovemmmt
(31
(3)
u.s.c. 321).
Title 29 o( the U.S.C. The Secretary of Labor has the responsibility to foster,
promote, and develop the welfare of the wage earners of the United States, to improve
their working conditions, and to advance their opportunities for profitable employment
(29 U.S.C. SSl).
4
�No.bJb4
(4)
¥. b/!L
Title 26 of the U.S.C. The Secretary of the Treasury has been given authority for
administration and enforcement of the Internal Revenue laws by the Internal Revenue
Code of 1986 and 31 U.S.C. 32l(c). The Commissioner of the IRS bas been &iven
authority for administration and enforcement of the Internal Revenue laws by the
Secretary of the Treasury in Department of the Treasury Order No. 150-10. This
includes authority over employment taxes (Subtitle C and F, 26
U.S.C.)~ ·
PARTIE'S TO THE AGREEMENT
The parties to the MOU are the U.S. Department ot the Treasury, the U.S. Social Security
Administration, and the. U.S. Department of Labor.
This agreement shall continue to apply to any entity of the United States Government which
is a successor in interest to.any Executive Agency which is a party to this ~t.
EFFECI' OF AGREEMENT ON OTHER PERSONS AND OTHER AGREEMENTS
This document is an internal Government agreement and is not intended to confer any right
or benefit on any private person or party.
Nothing in this agreement shall be interpreted as limiting, supersc:ding, or otherwise affecting
an agency's normal operations or decisions in carrying out its statutory or re&ulatory duties.
This MOU is not intended to repla.ce, limit, supersede, or otherwise affect otbez qreements
arnone or between the agencies except to the extent necessary for proper implementation of
this agreement.
s
�No.b3b4
~.
'//!(
EFFECI1VE DATE AND AMENDMENT
Tim MOU shall become effective upon the date of final signature and &hall remain in effect
for three years. This MOU may be amended by written agreement of all of the undenigned
or their designees.
We, the undenigned, do hereby agree with the foregoing provisions of this aareement.
Secretary of the Treasury
Date
Commissioner of Social Security
Date
Secretary of Labor
Date
6
�- - - - - - - - -
No.bjb4
!'.
~l!i
MEMORANDUM OF UNDERSTANDING
AMONG THE
INTERNAL ·REVENUE SERVICE,
SOCIAL SECURITY ADMINISTRATION
. AND
U.S. DEPARTME.NI' OF LABOR
BACKGROUND
The Internal Revenue Service (IRS) in the Department of the Treasury, the Social Security
Administration (SSA) and the Department of Labor are each participating in a project to
identify and pursue ways to improve the nation's wage and tax reportin' system. The project
is known as the Simplified Tax and Wage Reporting System (STAWRS).
The objective of each agency's participation in STAWRS is to reduce the tax and wage
reporting burden on employers while improving the efficiency and effectiveness
ot each
B.2ency'a operations. This objective is bein& pursued by: 1) aploring the feasibility of, and
making available, a variety of tax and 'Wage reporting services
tax
tD
employers and particlpatin1
entities, as appropriate, and 2) developing a harmonized wage code which will bring into
agreement the Fedetal and State definitions of wages and other tenns, due dates, fonns and
reporting formats relating to wage and tax reporting (to the extent practical), and the
employer identification numbering system.
Vice President Gore's National Pe.rfonnance Review (NPR) recommended pursuing this
initiative in the September 7, 1993 Report, •Prom Red Tape to Results, Creating a
Oovernment that Worb Better&. Costs Less.• The NPR included STAWRS in two
recommendations: TREOS, •simplify Employer Wage Reporting, • and
Intergovernmental Tax Filing. Reporting, and Payments Processing. •
rros,
•Provide
�-----
- - - - - - - - - - -
J un.
L J~ ~ ~
4 : 4 tl rM
NO. bjb4
r.
~!
lL
In another Memorandum of Understanding (MOU), the Secretary of the Treaswy, the
Commissioner of Social Security, and the Secretary of Labor acknowledged the importance
to each agency of reducing the tax and wage reporting burden and agreed to pursue the
STAWRS objectives in a coordinated fashion. That MOU also established an E.x.ecutive
Steering Committee, comprised of senior representatives from the Internal Revenue Service,
the Social Security Administration, and the Department of Labor.
PURPOSE
The purpose of this MOU is to implement the objectives of the MOU referenced above by
establishing a STAWRS Project Office. The Int.cmal Revenue Service will establish the
STAWRS Project Office. Agency liaison representatives from SSA and the Department of
Labor will coordinate the efforts of their respective a~encies through the STAW1tS Project
Office. STA WRS Project Office staff and SSA and Department of Labor liaison
representatives will work closely with each other and with their respective associatM
stakeholders to achieve the Project's objectives. The STAWRS Project Office will establlih
a facility appropriate for the extensive collaboration efforts contemplated by the three
agencies and for the broad-based stakeholder consultation envisioned under these Mou• s.
PSTABLISHMENT OF STAWRS PROJECI' OFFICE
1.
An Executive.In-Charge, designated by the Assistant Secretary for Management in the
Department of the Treasury. will lead the STAWRS Project Office.
2.
The Commissioner of the IRS will provide a minimum of two full-time equivalents to
serve in the STAWRS Project Office. The Commissioner of Social Security and the
Deputy Secretary of Labor will each provide a minimum of two full-time equivalents to
serve u agency liaison representatives to the· STAWRS Project. All commitments of
staff are subject to the availability of funds and are for the initial 36 months followin'
the signing of this MOU. or less, if the project is terminated earlier. SSA and the
2
-----------------------------~~-~-~
�NO. 0j04
r.
lU/[L
Department of Labor will, subject to the availability of funds, assume the costs ·
associated with the participation of their respective liaison representative£.
3.
STAWRS Project Office staff and SSA and DOL agency liaison representatives to the
STAWRS Project may work at their official duty stations, or the STAWRS Project
Office when direct collaboration is necessary to carry out their duties.
4.
··
The responsibilities of the STAWRS Project Office include: identifying, implementine,
and evaluating proof-of-concept pilot and demonstration projects; establishing and
operatin& a stakeholder relations and education program; drafting proposed le"slation,
regulations, orders, agreements, procedures, and related documents; developing and
analyzing alternatives for srAWRS management organizations; drafting a model
harmonized wage code; developing, evaluating, and recommending privacy, disclosure,
and data sharing policies;
draftini simplified forms and filing procedures; developing
proposed operational policies and procedures; and performing other related dutie£.
Agency liaison activities will include having "ency employees develop positions on
STAWRS Project issues related to their respective agency's mission. Each agency•s
representatives will ensure that proposed positions are communicated to and coordinated
with the affected agencies.
S.
The STAWRS Project Office will actively seek advice and recommendations from
individual stakeholders. including representatives from States, State and Federal
Government organizations, employers, employer organizations, labor orpniz.ations,
employees, privacy advocates, and from the public, as necessary.
6.
In addition to the staff provided in paragraph 2, the IRS will provide, subject to the
availability of funds, reasonably appropriate office fa.cllities, conference rooms,
equipment, supplies, and related support semces and clerical staff tor the day-to-day
operation of the STAWRS Project Office.
3
�r.
.NO, OJ04
7.
ll/ lL
The IRS will provide, subject to the availability of funds, reasonably necessary
communications facilities. These may include an 800 number and a PC-based bulletin
board to ensure full project participation by all stakeholders includine Fedem agcncie.!,
State Governments, employers, employer representatives, employee orpniutions, and
privacy advocates.
AUTHORITIES
(1) . Title 42 of tbe United States Code aJ.S.C.) Under Title XI of the Social Security
Act, the Secretary of the Treasury and the Secretary of labor make the necessary rules
and regulations for the efficient administration of the functioru with which each agency
is charged under the Social Security Act (42 U.S.C. 1302). Under litles U and Vll of
the Social Security Act, the Commissioner of Social Security is authorized to prescribe
such rules ·and regUlations as the Commissioner determines necessary or appropriate to
CMr'f out SSA's functions and may establish such procedure5 u the Commissioner
determines necessary and appropriate to carry out the provisions of Title U
(42 U. S. C. 405(a) and 902(a)(5)).
Title n of the Social Security Act authorizes the Secretary of the Treasury and the
Commissioner of Social Security to entet into an agreement to process tax information
under a Combined Annual Wage Reporting System (42 U.S.C. 432). The law
aUthorizes the Secretary. of the Treasury and the Commissioner of Social Security to
modify or change the manner of such processing by mutual agreement
The Commissloner of Social Security also must establish and maintain records of the
amounts of each individual's earnings from employment and selfooemployment and the
periods in which such amounts were earned (42 U. S.C. 40S(c)(2)(A)).
(2)
Title 31 of the U.S.C. The Secretary of the Treasury has responsibility for
plans for improving and managing receipts of the United States Oovernmcnt
4
prepann,
�~o.
(31
(3)
OJ04
r.
lU U
u.s.c. 321).
Title 29 of the U.S.C. The Secretary of Labor has the responsibility to bter,
promote, and develop the welfare of the wage earners of the United States, tD improve
their working conditions, and to advance their opportunities for profitable employment
(29
(4)
u.s.c. 551).
Title 26 of the U.S.C. The Commissioner of the IRS has been pvcn authority for
administration and enforcement 'of the Internal Revenue laws by the Secretary of the
Treasury in the Department ot tbe.Treasury Order No. 150-10. This includes
authority over employment taxes (Subtitle C and F, 26 U.S.C.).
PARTIES TO THE AGREEMENT
The parties to this MOU are the Inte.mal Revenue Se:vice, the Social Security
Administration, and the Department of Labor. This ·agreement shall continue to apply to any
entity of the United States Oovernrnent which is a successor in interest to any Eucutive
Agency which is a party to this agreement.
EFFECT OF AGREEMENT ON OTHER PERSONS AND OTHER AOREEMENI'S
This document is an internal Oovernment agreement and is not intended to confer any right
or benefit on any private pezson or party.
Nothin& in this agreement shall be interpreted as limiting, superseding, or otherwise affecting
an iiency•s nOI1ll21 operations or decisions in·carrying out its rqulatory or lepl dutie.!.
This MOU is not intended to
replace, limit, supersede, or otherwise affect other agrccmenu
among or between the agencies except to the extent necessary for proper implanentation of
this agreement.
s
�Not yet
participated-----.
r
Showed
interests
.·!
·.~ Particij:pated
~
.I
'
...
.:
\
...
State Participations In STAWRS
�· Prototype: Single Filing Through
Electronic Commerce
Single
Filing
8111eTu
Agencl..
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�PRESIDENT AND VICE PRESIDENT
NPR PHASE II ROLL-OUT ANNOUNCEMENT
DEPARTMENT OF THE TREASURY
JUNE 9, 1995
Invitation List
Department of the Treasury:
Robert E. Rubin, Secretary of the Treasury
David Dreyer, Special Assistant to the Secretary
Frank N. Newman, Deputy Secretary of the Treasury
David A. l..ebryk, Special Assistant to the Deputy Secretary
J. Benjamin H. Nye, Executive Secretary
George Munoz, Assistant Secretary (Management) & CFO
W. Scott Gould, DAS (Departmental Finance & Management)
Ed Verburg, Deputy Chief Financial Officer
Alex Rodriguez, DAS (Administration)
Bill Chou, DAS (Information Systems)
Mary Ellen Withrow, Treasurer of the United States
Valerie Lau, Inspector General
(Designee), Under Secretary for Domestic Finance
Ron Noble, Under Secretary (Enforcement)
Gerald Murphy, Fiscal Assistant Secretary
Richard Carnell, Assistant Secretary (Financial Institutions)
Larry Summers, Under Secretary for International Affairs
Jeffrey R. Shafer, Assistant Secretary (International Affairs)
�Ed Knight, General Counsel
Les Samuels, Assistant Secretary (Tax Policy)
Mike Levy, Assistant Secretary (Legislative Affairs)
Alicia Munnell, Assistant Secretary (Economic Policy)
Joan Logue-Kinder, Assistant Secretary (Public Affairs)
Tony Fleming, Office of Treasury Reinvention
Department of the Treasury (Bureau Heads):
Margaret Milner Richardson, Commissioner, Internal Revenue Service (IRS)
Russell Morriss, Commissioner, Financial Management Services (FMS)
George Weise, Commissioner, U.S. Customs Service (USCS)
Phil Diehl, Director, United States-Mint (USM)
Eugene Ludwig, Comptroller, Office of the Comptroller of the Currency (OCC)
Jonathan Fiechter, Director, Office of Thrift Supervision (OTS)
Richard Gregg, Commissioner, Bureau of the Public Debt (BPD)
John Magaw, Director, Bureau of Alcohol, Tobacco & Firearms (ATF)
Eljay Bowron, Director, U.S. Secret Service (USSS)
Charles Rinkovech, Director, Federal Law Enforcement Training Center (FLETC)
Peter Daly, Director, Bureau of Engraving & Printing (BEP)
�Bullet Points for June 9 Presidential Presentation
on Small Business Burden Reduction
General
Treasury Department is announcing today the expansion of an important
initiative aimed at reducing the wage and reporting burden of employers and
other taxpayers. The Treasury Department and IRS are also announcing today
that the Administration will pursue legislation enabling the IRS to further develop
partnerships with state tax agencies to reduce taxpayer burden, improve
taxpayer service, and minimize tax administration costs.
Simplified Tax and Wage Reporting .Project
•
The goal of Treasury's simplified tax and wage reporting project is to
reduce tax and wage reporting burdens on employers while saving
Federal and state operations costs.
•
The purpose of the project is to develop a voluntary system with
stakeholders (states and employers) that:
•
•
SIMPLIFIES LAWS, DEFINITIONS, AND PROCEDURES related to
tax and wage reporting (wprker classification, wage components,
data definitions, employer identification numbers, filing procedures
and periods, forms and formats)
•
ENABLES AN EMPLOYER TO FILE A SINGLE RETURN
ELECTRONICALLY-- An electronic commerce network will map
the data into appropriate formats for sending to appropriate State
and Federal agencies.
•
PROVIDES ENHANCED ASSISTANCE AND SERVICES TO
EMPLOYERS FOR EASIER FILING
The project has three primary objectives:
1)
optimize harmonization of Federal and state tax and wage codes -i.e., have tax jurisdictions use similar definitions of key terms:
employee, employer, employment and wages;
2)
develop one-stop electronic filing for tax and wage reporting -- i.e.,
. have employ_ers and tax agencies use national electronic commerce
�networks where employers would be able to input data only once
rather than multiple times; and
3)
provide employer services for easier data submissions --i.e.,
provide direct, technical assistance to new employers and enable
·employers to validate employee social security numbers via
personal computers or telephones.
Important Principles:
•
Maintain jurisdictional neutrality and sovereignty
•
Minimize impact on existing system/programs (emphasize
compatibility)
•
Minimize impact on employee benefit programs
•
Maintain revenue neutrality impact on government agencies.
•
Protect privacy of participants.
Already in Process - •paper W-2 Project":
•
Employer W-2 Submissions -- current operations:
..
•
•
Large employers (over 250 employees) --submitting magnetic tape
containing all employers W-2 data to SSA and to States.
Small employers-- submit paper W-2 to SSA and to individual
States.
The •paper W-2 Project":
•
Small employers send paper W-2 to SSA. SSA scans the paper,
turns the data over to IRS which, in tum, sends tapes to 29
participating States, compiling the employer data for each State.
•
Illinois no longer requires employers to submit separate paper W-2
data; other States are expected to do the same.
2
�The Future:
When the project is fully implemented, it is projected that employers may
save up to $1 billion annually in tax and wage reporting costs. (Of the
approximately 6.2 million employers in the United States, 60% have fewer
than 5 employees; therefore, small businesses in particular will benefit
from reductions in reporting burdens.
Other:
•
The simplified tax and wage reporting system is a joint project of the
Department of Treasury, the Internal Revenue Service, the Social
Security Administration, the Department of Labor, the Office of
Management and Budget, various States (29 are currently involved), and
private organizations.
FedState Partnerships - Making Taxation Less Taxing
•
The IRS and state taxing authorities are working together to reduce
taxpayer burden, improve taxpayer service, and minimize tax
administration costs. The goal is to eliminate duplicative tax requirements
and to take advantage of economies of scale in tax administrat:on
·
wherever possible.
Current Successes:
•
Joint Electronic Filing- Through a FedState joint program, taxpayers
can satisfy both their federal and state filing requirements with a single
electronic transmission. 29 states participated in joint electronic filing in
1995, with more than 1.5. million returns filed. The program will expand to
32 states in 1996.
•
Filing Assistance- The IRS and many state tax agencies jointly
distribute tax forms and provide taxpayer filing assistance.
•
Joint Outreach Programs- The IRS is working with many stc.tes to
jointly provide:
-- tax counseling for the elderly,
education for new businesses,
.3
�education for other targeted taxpayer groups,
tax practitioners' workshops, and
-- educational publications.
Barriers:
•
Further growth in FedState partnership programs is hampered because·
the IRS is currently barred from using appropriated funds to provide ·
services to state agencies, even if the cost is reimbursed.
•
Because of present disclosure laws, a joint electronic filer must file in
duplicate any tax data that is required by both the IRS and the state; the
IRS then must transmit the second set of data to the state.
Removing Barriers:
•
To enhance the growth of Fed State partnerships, we are proposing
legislation that would allow the IRS to use appropriated funds for
FedState reimbursable projects and eliminate restrictions on the use of
data that is common to both Federal and state tax returns.
•
The legislation would serve as a model for states that need legislative
changes to remove their barriers to growth in FedState partnerships.
These proposals have been endorsed by the Federation of Tax
Administrators representing all 50 states.
The Future:
•
Once the legal barriers are removed, the IRS and the states will be able
to engage in countless new cooperative efforts that would make taxation
less taxing by:
•
eliminating the requirement that taxpayers provide the same
information to both the IRS and the state taxing authorities;
•
allowing taxpayers who make errors in their electronic returns to
correct those errors by working with a single contact point for both
Federal and state purposes;
•
offering •one-stop serviceu where taxpayers could call one location
and receive answers to federal and state tax questions;
4
�\
.
•
•
•
allowing taxpayers to satisfy their tax obligations by entering into
coordinated installment agreements with the IRS and state taxing
agencies; and
•
paving the way for the development of a single federaVstate income
tax form.
The cost of government will be greatly reduced through eliminating
duplicative tax administration efforts and taking full advantage of available
economies of scale.
Preliminary Treasury estimates, assuming participation by 20 percent of
·the states, show cumulative benefits by FY 2000 of:
$1.5 billion reduction in taxpayer burden, and
$315 million increase in revenues.
Other NPRII Initiatives
Other NPRII initiatives include:
•
improving the Federal government's debt collection record;
•
streamlining administrative services and consolidating the field
offices of various Treasury agencies;
•
consolidating certain Treasury Department target services
(personnel, procurement, accounting, and budget);
•
consolidating border operations (Customs and INS' primary
inspection function);
•
developing an electronic smart card, a form of electronic .currency
similar to the farecards now used in Washington's Metro system
that could make Treasury purchases and benefit payments more
efficient.
5
�REDUCING THE BURDEN TO
SMALL BUSINESS OWNERS AND THE AMERICAN TAXPAYER
THE PRESIDENT'S SPEECH
June 9, 1995 in ....
OPENING REMARKS
I am pleased to welcome everyone to [name of business] to announce the
Department of Treasury's initiatives to reduce the burden on small businesses
. and the American taxpayer. In the spirit of reinventing government, Treasury
is leading a cooperative effort between the Federal and State governments.
People have long complained about the many forms and complicated steps
required to file our taxes.
Today, employers often must file forms in more
than one place at the federal level in addition to filing with each state
government. We know what a burden the current
reportin~
system has placed
on everyone and we are changing it.
Treasury is spearheading the Simplified Tax and Wage Reporting System
(ST AWRS) [pronounced stars]. As the name suggests, ST AWRS is meant to
simplify the filing process. For America's 6.2 million employers, this could
eliminate the need to. file W-2 data multiple places. This will mean a single
report filed in one place. Already Illinois has eliminated the paper filing
requirement. [get additional specifics from steve bryant]
·.
�;-·--.,;.·.. .....
_,
~
.... ,_
:; DRAFT
.While achieving these successes, the project will ensure State sovereignty is
being protected, employees benefits are not adversely impacted, and privacy is
being protected.
In order to further reduce the burden for all taxpayers, I am proposing
legislation that promotes cooperative agreements between the Federal and state
governments. These agreements will remove barriers, allow joint filing, and
promote customer assistance by offering one-stop. service. Overall, this will
provide a $1.5 billion reduction in taxpayer burden.
Government has got to run like a business. Initiatives like these and the others
from the Treasury reflect our continuing effort to the quality of
government. ... [closure] ..
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�Talking Points
for Secretary Rubin
NPR Phase II Roll-Out
June 9, 1995
!0:30AM, Cash Room, Main Treasury
LOCATION:
•
Who--President Clinton, Vice President Gore, other Secretaries, representatives of core
constituencies (small business owners ... ), and Secretary Rubin
•
Where--TBD
•
Why--
TREASURY'S MISSION:
•
The Department of the Treasury's mission is to:
formulate and recommend economic, fiscal and tax policies;
serve as financial agent of the United States Government;
enforce the law;
protect the President and other officials; and
manufacture coins ·and currency.
TREASURY'S REINVENTION PROCESS:
•
Treasury pursued the principles of NPR Phase I by:
developing streamlining plans;
setting customer service standards; and
reforming procurement practices.
•
Treasury's Secretary embraced the NPR Phase II objectives and challenged Treasury
bureaus to develop bold and specific proposals for:
Improved Service to the Customers and Citizens;
Reduced Budget and Staffing (FTEs);
Alignment of Treasury Services with our Mission;
Empowered Employees Responsive to Stakeholder Needs; and
Increased Revenue.
�•
Treasury utilized a two-pronged approach with bureau teams and a Department-level,
cross-cutting Nucleus Team working independently to develop NPR Phase II
proposals.
•
Treasury's Deputy Secretary directed each bureau head to establish a team to:
Develop a list of bold proposals to devolve, privatize, terminate, franchise, and
reinvent focusing on two timeframes: short term (one year) and longer term
(five to seven year) time frames. Include regulatory reform issues; background
information, arid analysis and recommendations.
Develop strategies to implement recommendations.
Link downsizing efforts with revitalization.
Take care of our people throu~hout the process.
•
A Nucleus Team, comprised of senior level political and career officials, was formed
to develop ideas for the Deputy Secretary's consideration, and provide guidance to the
Bureau Teams on administrative items.
•
A composite of both Teams' ideas was developed and accepted by the Deputy
Secretary.
•
Potential benefits to the American Public from Treasury's NPR initiatives include:
reduced taxpayer burden; and
increased customer service.
REINVENTING GOVERNMENT:
In March 1993, President Clinton announced his commitment to make fundamental changes in
the nature and operations of the Federal Government and to create a government that "Works
Better and Costs Less." He established a framework for promoting this change process -- the
National Performance Review -- and asked Vice President AI Gore to personally lead this
effort.
"Our goal is to make the entire federal government both less expensive and more
efficient, and to change the culture of our national bureaucracy away from
complacency and entitlement toward initiative and empowerment. We intend to
redesign, to reinvent, to reinvigorate the entire national government. "
President Clinton-March 3, 1993
2
�The National Performance Review
•
The NPR adopted four key guiding principles.
Cut red tape.
Put the customer first.
Empower employees to get results.
Cut back to basics.
•
There have been two phases of the NPR Process
Phase I of NPR was focused on government-wide reinvention
Phase II of NPR was focused on agency-specific reinvention
•
Under Phase I, the federal government accomplished:
Streamlining the bureaucracy through reengineering -- federal employment has
dropped by 98,000;
Consolidating and modernizing the information systems infrastructure;
Creating customer service standards -- over 100 .federal agencies have published
customer service standards; and
Reforming procurement processes -- restrictions have been lifted and best
practices promoted.
•
Under NPR Phase II, agencies were tasked to develop bold, agency-specific proposals
for reinvention. To identify potential candidates for change, the NPR provided a
"Decision Tree," which asked the questions:
What functions and agencies can be devolved, privatized, terminated,
franchised, reinvented or eliminated?
Can competition be introduced to improve performance?
How can customer service be enhanced in programs that are continued?
How can NPR principles be applied to put customers first, cut red tape, and
empower employees, taking care of our people in the process?
3
�-------------
Treasury Phase II Outcomes
•
The 7 bold proposals were presented to and accepted by the Vice President, who
commended Treasury for its NPR Phase II efforts. The 7 accepted proposals are:
1)
2)
3)
4)
5)
6)
7)
•
Improving Debt Collection in the Federal Government;
Federal/State Tax Partnership;
Simplified Wage and Tax Reporting System (ST AWRS);
Consolidate NPR-Targeted Services;
Streamline Treasury Field Offices;
Consolidate Border Operations; and
Electronic Smart Cards.
Preliminary estimates show NPR Phase II initiatives have potential for:
$1-3 billion additional revenue;
$0.5 billion cost savings;
$3 billion reduced taxpayer burden;
savings of 4,000 FTEs; and
and better service for tax filers and travellers.
4
�Office of the Secretary
Contact: John Murchinson
(202) 622-2960
For Immediate Release
Friday, June 9, 1995
CLINTON ADMINISTRATION ANNOUNCES
BOLD IDEAS FOR THE
DEPARTMENT OF THE TREASURY'S
NATIONAL PERFORMANCE REVIEW PHASE II
The Clinton Administration today announced that the Treasury Department will expand its
STA WRS project, aimed at reducing the tax and wage reporting burden of employers and
taxpayers. The Department also intends to enter into voluntary tax partnerships with the
states, moving toward a "single return" and providing for the reciprocal exercise of tax
authority.
STA WRS, shprt for Simplified Tax And Wage Reporting System, reengineers current
processes to:
•
•
•
Harmonize tax and wage codes
Use electronic filing for all tax and wage reporting
Provide employer services for easier data submissions
The aggressive FederaVState Tax Reporting Partnership moves the public ever closer to a
"single return", minimizing the need for multiple returns and duplicative, manual intensive
data preparation.
Both proposals will save taxpayers, the business community, and government billions of
dollars over .the next five years.
Also sharing center stage were five other initiatives that represent the Department's
concentrated efforts at defining its core missions, restructuring operations, and increasing
opportunities for revenue collection.
Improving Debt Collection in the Federal Government
•
•
•
•
Using offsetting Federal payments
Making full use of measures allowed by law
Legislation to provide stronger, consistent remedies
Using a layered collection process
Consolidation of NPR Targeted Services
•
Reduce and consolidate personnel, procurement, accounting and budget
�•
functions
Introduce competition into the delivery of these services
Streamline Treasury Field Offices
•
•
Set targets for streamlining and/or consolidation
Reduce office space and personnel
Consolidate Border Operations
•
•
Combine Customs and INS' primary inspection functions
Recommend best site processing methods within 90 days
Electronic Smart Card
•
•
•
Market maker
Provides a government service
Opportunities for private sector sales
These seven bold ideas represent Treasury's commitment to the Administration's ambitious
plans for reshaping government services, lowering costs, and earning back the respect of our
customers - the American public.
See attached fact sheet for details.
�~
....... , .......
Telephone Discussion between Elaine Kamark
and George Muno:, Thursday, June 1, 1995.
S'ITB
-still looking for site. Likely to be a small business site of
Clinton appointed delegate to the WHCSB located in the.. a.rea.
PJUi:SENTAT:IONS I
-Secretary Rubin's Speech includes the following:
1. ·Describe the location where the event is being held and
why it is there.
2. Explain the Treasury Dept.'s mission and process of
reinvention and what it means to ordinary Americans. (e.g.,
Treasury is committed to burden reduction and everything it is
doing is geared toward that goal while still carrying out its
responsibilities.N)
3.
Introduce the Vice President.
-Vice ~resident speaks on Reinvention generally and introduces
the President.
4.
-President: More specific on burden reduction. Presents STAWRS,
and Fed/State Partnership, and Commissions a [3 - 6 month] Study
on Streamlining FUTA Reporting and Collection. MOU signing to
follow. Perhaps have comments from Governor or other invited
guest.
DELXVERABLE:
Due tomorrow, Friday, June 2nd by noon is a statement on
STAWRS that has been cleared by all policy offices (including
OMB) . To be transmitted to Elaine Kamark which she will use for
Business Week. Business Week hits the stands on June 9th, and
will cover this piece. Need quote from Secy Rubin as part of the
write up of STAWRS.
KOU FOR STAWRS. Make sure that the 3 Secretaries are notified of
the event and that they are to attend for the signing ceremeny.
WORE OR LANGUAGB fer the Study en POTA S~lification.
WORK ON VIS~S FOR TBE EVENT. Can we have a DEMO on the site.
Can we have a small business owner or tax tiler who has made use
of either STAWRS or FED/STATE PARTNERSHIP? Small business owner
from Iowa?
WORX ON SATELLITE POSSIBILITIES
W~LL GET MAYBE 30 - 50 SLOTS FOR INVITEES.
�Uts/UJ./11:>
.L.J;,,
,..
-- .. --·
F.Y.I.
Telephone Discussion between Elaine Karnark
and George Munoz, Thursday, June 1, 1995.
SIT2
-Still looking for site. Likely to be a small business site of
Clinton appointed delegate to the WRCSB located in the. area.
PRi:SEN'TAT:IONS 1
- Secret·ary Rubin's Speech includes the following:
~Describe the location where the event is being held and
why it is there.
·
2. Explain the Treasury Dept.'s mission and process of
reinvention and what it means to ordinary Americans. (e.g.,
Treasury is committed to burden reduction and everything it is
doing is geared toward that goal while still carrying out its
responsibilities.M)
3.
Introduce the Vice President.- ------Vice President speaks on Reinvention generally and ineroduces
the President.
4.
-President: More specific on burden reduction. Presents STAWRS,
and Fed/State Partnership, and Commissions a [3 - 6 month] Study
on Streamlining FUTA Reporting and Collection. MOU signing to
follow. Perhaps have comments from Governor or other invited
guest.
DELIVERABLE:
Due tomorrow, Friday, June 2nd by noon is a statement on
STAWRS that has been cleared by all policy offices (including
OMB) . To be transmitted to Elaine Kamark which she will use for
Business Week. Business Week hits the stands on June 9th, and
will cover this piece. Need quote from Secy Rubin as part of the
write up of STAWRS.
Make sure that the 3 Secretaries are notified of
the event and that they are to attend for the signing ceremOny.
KOU FOR STAWRS.
WORE
~
LANGUAGE fer the ·Study en FOTA
S~liticatien.
WORX ON VISUALS FOR. THE EVENT. Can w-e have a DEMO on the site.
Can we have a small business owner or tax tiler who has made use
of either STAWRS or FED/STATE PARTNERSHIP? Small business owner
from Iowa?
WORX
~
SATELLITE POSSIBILITIES
WILL GET KA.Y.BE 3 0 . - 50 SLOTS FOR. INVXTEES •
,
�--
- - - - - - - - - -
.'
l\1EETING TO DISCUSS
REGO II EVENT
\VITH PRESIDENT AND VICE PRESIDENT
May 24, 1995
11:00 am
AGENDA
1.
Status and Overview of 2 highlighted activities:
•
•
STAWRS
Fed/State, Partnership for Single Return
2.
Status and Overview of FUTA proposal from Department of Lai:>Or ·
3.
Perspective from various stakeholders and parties of interest:
Management (Gould/Chou)
Internal Revenue Service
Tax Policy
Legislative Affairs
Public Affairs (Murchinson)
Secretary Rubin's Office (Dryer)
Deputy Secretary's Office (Lebryk)
In addition, the perspective from NPR, Ol\1B, and the
White House will be discussed by Management
4.
Creation of Checklist and Assignments for Process, Protocol, and .
Deliverables
5. . Follow-up with parties outside of Treasury and agree on schedule for
next meeting
�MINUTES FROM MEETING TO DISCUSS
REGO IT EVENT WITH
PRESIDENT AND VICE PRESIDENT
May 24, 1995 ·
Purpose:
To discuss Treasury's strategy and plan for presenting NPR Phase II "Bold Ideas" at the June
9 meeting with the President and Vice President.
List of Attendees:
Treasury Department
George Munoz
Clara Apodaca
Julie Huffman
John Murchinson
Bill Chou.
Steve Bryant
Joel Taub
Lowell Dworin
Al Arena
James Coleman
Internal Revenue Service
Beverly Monaco
· --·--- -J. Paul· Whitehead
Doug Dillon
Steve Holden
Frank Keith
Opening Remarks (George Munoz)
Rego IT event with President and Vice President is now scheduled for June 9.
Going to focus on STAWRS and Federal/State Partnership; other items will be mentioned,·
but not significantly highlighted.
Labor/Treasury activities where focus is on reduced burden for employers is the key.
This event will be a prelude to the June 11 Small Business Conference.
Status and Overview:
STAWRS (Bill Chou)
Goal of this project is to reduce the tax and wage reporting burden of employers and
taxpayers by reengineering current reporting processes. This is a voluntary participation
program with interested states.
�Objectives:
Harmonize tax and wage codes
Use electronic filing for all tax and wage reporting
Proyide employer services for easier data submissions
Strategy:
Uses existing infrastructure and software
Field Test with limited trading partners
Scenario:
Electronic submission of IRS Form 941, Quarterly Withholding, and selected State forms
Use a Value Added Network (VAN)
Concerns:
--------------------------
Will any additional information be required from employers with an electronic submission?
Who will administer the VAN?
Any policy questions?
Need to add a fourth slide for the Vision Statement
. "Protecting Privacy Rights of Citizens"
Total Cost ofProject:
$50M
Savings:
$17B in first ten years after start-up
$15B in the private sector
$2B in the government
$1. 7B annual savings to business community after start-up
Federal/State Tax Partnership (Beverly Monaco)
Goal:
To expand the Federal/State tax partnership to permit coordinated filing on a single return
Outcomes:
Reduce compliance burden for taxpayers
Improve cost effectiveness of tax administration
Minimize necessity for multiple returns
�Savings:
$1. 5B annually to government
$1. 7B to taxpayers
IRS Position:
The IRS wants to move toward an integrated return, but does not espouse a single return
concept!
IRS Strategy:
Passage of a legislative proposal that provides for the reciprocal exercise of tax authority and
gives states the opportunity to enter into agreements for the delegation of tax administration
functions to the federal government without relinquishing sovereignty .
.
-- - - - - - - - - - - - - - - - - - - - - - - - - -
Passage of this enabling legislation addresses ...
disclosure issues
the use .of federally appropriated funds to administer taxes
Why not announce a "single return"?
Legal issue of state sovereignty
Technological issue (need $ to fund new programs and systems)
Legacy Systems currently used to process returns (don't want to divert resources from TSM)
Disclosure/Privacy Act issues
To date:
32 out of 41 states with income tax allow electronic filing of returns, however, taxpayers are
still burdened by need to have someone submit the data.·
Status of FUT A
Are awaiting a Go/No Go decision by Thursday, May 25th
Perspective
Management (George Muiioz)
What message is Treasury going to convey at the June 9 event?
Treasury needs to be supportive of the administration's focus on reducing filing burdens for
employers and taxpayers.
�Want to show that we are working on something.
We do not want the President to say something that isn't correct or that we can't deliver on.
We do. want to facilitate independence of state tax systems.
Public Affairs (John Murchinson)
Suggested that the next meeting include a representative ofthe NPR to participate in the
process to defme our position on STAWRS and Fed/State.
Deliverables: (George Munoz)
Schedule a meeting for Tuesday, May 30, at a location TBD later (Clara Apodaca)
Participants should be IRS, NPR, and Office of Management/CFO to resolve what the
focus of the -message is going to be.
- - - - - - - - - - · ------- -----------------·····-· -··· ·-
,·- .
Prepare papers for the May 30 meeting outlining what Treasury's message should be to the
President on ...
STAWRS (Steve Bryant, Treasury)
Federal/State Tax Partnership (J. Paul Whitehead, IRS)
" - "
(James Coleman, Treasury)
�MEETniG TO DISCUSS
REGO II EVENT
WITH PRESIDENT AND VICE PRESIDENT
MAY 30, 1995
2:00PM
AGENDA
•
Point Papers
-Fed/State
-STAWRS
- Debt Collection
•
Message for the President
- Draft Press Release
•
NPR Involvement
•
Next steps
Attachments
- Point papers
- Draft press release
�MINUTES FROM MEETING TO DISCUSS
REGO II EVENT WITH
PRESIDENT AND VICE PRESIDENT
May 30, 1995
Purpose:
To discuss Treasury's strategy and plan for presenting NPR Phase II "Bold Ideas" at the June
9 meeting with the President and Vice President.
List of Attendees:
Treasury Department
George Munoz
W. Scott Gould
Julie Huffman
Bill Chou
Steve Bryant
Al Arena
James Coleman
Ed Verburg
Internal Revenue Service
J. Paul Whitehead
Bill Lovelace
Judy Ochs
Oliver Robinson
Doug Dillon
Opening Remarks (George Munoz)
We want to try and schedule these meetings every two days.
Point Papers
Federal/State (George Munoz)
Like the format used with this paper.
We need to change the heading and emphasize the vision for the project.
Want to articulate the Fed/State cooperation concept.
Expound on the "More Specifically" section of the paper, let us know what you're going to
do in the next year.
,
Need to provide estimates for savings.
There are no dollar figures attached.
Let's keep this in DRAFT form and revise for the next meeting.
�ST AWRS (George Munoz)
Want to harmonize both papers, using the IRS fonnat.
Expand the paper and begin with the concept, then the detail.
Let everyone know who is involved (stakeholders) and what are the guiding principles of the
project.
Approximate cost for implementation is $50M. Figure doesn't include state costs.
If we're going to go forward with STAWRS, then why are we still calling it prototype?
We must be able to "vouch" for this by theJune 9 ceremony.
We need to speed-up the process of identifying the numbers and the logic behind them.
Use this opportunity to revisit the project and check old compromises; take a fresh look.
a
Debt Collection (Ed Verburg)
The point paper is being reformatted and revised.
It will be ready for the next meeting.
Messa~:e
for the President (George Munoz)
We want to follow-up on the President's theme of reducing the burden to small business
owners and the American taxpayer.
We don't need a press release, but a short speech by .the President that would begin with
something like, "People have long complained about the .... "
Public Affairs could then work with the White House to fashion a press release.
NPR Involvement (George Munoz)
We still don't know which of the two (Fed/State or STAWRS) will receive the primary focus
at the June 9 event.
Do we know what the NPR wants to focus on?
What is the status of the PUT A issue?
Could possibly roll PUTA in with STAWRS message.
Dan Neal, the NPR Small Agency Team Leader, was supposed to attend today's meeting.
We need input from NPR to assist in finalizing preparations for the event.
O&A
Bryant
Would you like to have an MOU signing at the event between Treasury and
the Department of Labor?
Munoz
Yes. Let's add this to the next meeting's agenda under Logistics.
We need to discuss the signing, props, and who to invite.
Whitehead
In conversations with the advocate for small business, found out that they are
pushing for more consolidated filing. Where is STAWRS going with this
issue?
�It's Treasury's role to reel-in small businesses.
Greg Woods, NPR Customer Service, would also like more information in this
area.
Munoz
We need to add another item on the agenda for the next meeting - Other
Stakeholders.
Be prepared to discuss who we might need to invite to the ceremony as
representatives of small business (i.e. SBA Advocates, Trade Assoc.,
Members of Congress, etc.).
Next Steps (George Munoz)
Schedule a meeting for Thursday, June 1, at 2:00PM.
Agenda items:
Point Papers - Revisions, and Short-Term Deliverables
Message for the President
Logistics
Other Stakeholders
Next Steps
Revise and reformat point papers using IRS model.
Bill and Scott will take a close look at expenditures for STAWRS, remembering that the June
9 Presidential announcement is the last word.
AI will work with 001 to develop a DRAFT speech for the President.
OTR owns the process of facilitating these meetings.
�·'
MEETING TO DISCUSS
REGO II EVENT
WITH THE PRESIDENT AND VICE PRESIDENT
June 2, 1995
9:30AM
Room 1457, Main Treasury
AGENDA
1.
Point Papers - Revisions, and
Short-Term Deliverables
•
•
•
2.
Message for the President
•
3.
STAWRS
Federal/State Partnership
Debt Collection
Speech/Press Release
Logistics
•
•
•
Memorandum of Understanding Signing
Props
Invitations (GueSt List)
4.
Other Stakeholders
5.
~ext
Steps
�:M1NUTES FROM :MEETING TO DISCUSS
REGO ll EVENT WITH
PRESIDENT AND VICE PRESIDENT
June 2, 1995
Purpose:
To discuss Treasury's strategy and plan for presenting NPR Phase II "Bold Ideas" at the June
·
9 meeting with the President and Vice President.
List of Attendees:
Treasury Department
Internal Revenue Service
NPR
George Mufioz
W. Scott Gould
Ed Verburg
David Vandivier
Bill Chou
Steve Bryant
Becky Lowenthal
James Coleman
Lowell Dworin
Chris Peacock
Chris Egger
Tony Fleming
Edd Barnes
Al Arena
Bob Wenzel
Oliver Robinson
Mike Danilack
Beverly Monaco
·Bill Lovelace
Mary Mozingo
Point Papers - Revisions. a·nd
Short-Tenn Deliverables
STAWRS
Paper now has a vision statement, guiding principles, short-term deliverables and cost data.
Steve Bryant stated that by the end of '96, the electronic submission piece will be fully
implemented.
Mary Mozingo said that will be too late. We need to have deliverables prior to the election.
Steve Bryant said that W-2 electronic filing will be in place by February '96. Want to pilot
with South Carolina and Mirmesota.
·
�George Munoz instructed Public Affairs to wordsmith the paper so that the President can
extract information for his speech.
George Muiioz said that the President will announce the FUTA partnership between DOL
and Treasury, and is going to commission a study of the project.
Mary Mozingo said that since we're now linking FUTA with STAWRS, we h.ave to make
changes, not just commission another study.
Scott Gould suggested that we link the FUTA study with the '97 budget process; want to be
consistent with the GPRA request; no acronyms please.
George Muiioz felt that internally we need· to consider the logistics of how we're going to do
this.
George Muiioz wants a sign-off on what we feel comfortable with being able to accomplish
with STAWRS; ask yourself if the purpose is. critical; will harmonization of tax codes impact
business?
Beverly Monaco explained that the prototype with 2 states is critical to the project's success;
the problem with harmonized wage codes is the disconnect between Federal and State
defmitions and exceptions.
George Munoz explained that we want to optimize the harmonization issue; soften it; take
one more cut at the STAWRS paper; expand the short-term deliverables and try and estimate
the burden on employers.
George Muiioz wanted to know if we could demonstrate STAWRS at the June 9
announcement; MOU signing not enough.
Bill Chou said we can't have a demo before the end of December.
FederaUState Partnership
Beverly Monaco said that IRS is still uncomfortable with the single filing concept; they want
to show the larger picture.
She suggested .a visual that would show all parties competing for taxes, then show a linkage
of these working together to better serve the public.
Beverly Monaco said that the Barriers section of the paper shows what we still need to do;
we need legislation to move ahead, but it hasn't been introduced yet.
�There are 2 versions of the legislation:
•
•
"Peter Rabbit" version (short)
Version as written by IRS (preferred by IRS)
If passed, would provide a framework for "one-stop service centers", joint examinations,
joint distribution of forms and publications, shared workloads and coordinated efforts to
assist newly formed small businesses.
·
Mary Mozingo wanted to know if we could have the President hold up the legislation as a
showpiece?; how can we get it on a fastrack?
Scott Gould is to get with legislative affairs to develop a strategy for passage.
George Munoz wants a Democratic Governor to convey the message that the Feds are
working in partnership with States to reduce taxpayer burden; partnership is not about "big
brother"; Colorado is first choice, Indiana second.
George Munoz tasked Chris Peacock (Public Affairs) with investigating possibilities of a
satellite broadcast of the event, since DOL, SSA, and a governor are also invited; want to
tailor the story for commercial distribution.
Also need Public Affairs to "cleanse" the point papers; highlight 5 year savings figures; lump
totals to show burden reduction; coordinate this effort with Scott Gould.
Debt Collection
Ed Verburg said that the legislation is circulating for final approval; scoring is almost
complete (comparing tapes with IRS/FMS records).
George Munoz said that we won't highlight this one, but it is one of the 7 "bold ideas";
Public Affairs needs to rework the paper, tone it down; the dollar amount is at issue; the
vision is well articulated.
Press Release
George Munoz shifted responsibility for the President's speech to the IRS Public Affairs
Office; they're going to make the "first cut" for STAWRS and Fed/State, using bullets that
can be extracted by the President's speech writer; need an accompanying "fact sheet".
�MOU Signing
This is high priority; already signed-off by Treasury.
George Munoz suggested that we have a small business person participate in the signing as a
witness; we're inviting the Secretary of Labor and Social Security, along with the IRS
Commissioner.
Beverly Monaco reminded us that the small business representative and the Governor would
have to go through a heavy clearance process; don't want the President embarrassed.
George Munoz also would like to have an orientation session for the small business person so
they know what's expected of them at the signing ceremony.
Next Steps (June 6)
Schedule the next meeting for Tuesday, June 6, at 9:15AM.
Will invite representatives from Treasury Legislative Affairs, DOL, SSA, and also a member
of the White House Press Group (speechwriter).
All
poin~
papers to be revised.
Communications plan from Public Affairs (satellite possibilities).
�l\1EETING TO DISCUSS
REGO II EVENT
WITH THE PRESIDENT AND VICE PRESIDENT ·
June 6, 1995
9:15AM
Grant Room, Main Treasury
AGENDA
1.
Point Papers - Revisions, and
Short-Term Deliverables
•
•
•
STAWRS
Federal/State Partnership
Debt Collection
2.
IRS Legislative Package
•
"Peter Rabbit"
• .
Expanded Text
3.
Message for the President
•
4.
Speech/Press Release
Logistics
•
•
•
•
Memorandum of Understanding Signing
Props
Invitations (Guest List)
Satellite Communications
5.
Other Stakeholders
6.
Next Steps
�cc:
George Muiioz
W. Scott Gould
Tony Fleming
Ed Verburg
Erik North
Bob Wenzel
David Vandivier
Oliver Robinson
Bill Chou
Steve Bryant
Becky Lowenthal
Mike Danilack
Beverly Monaco
James Coleman
Lowell Dworin
Chris Peacock
Chris Egger
Bill Lovelace
Edd Barnes
J. Paul Whitehead
Clara Apodaca
Julie Huffman
John Murchinson
David Dreyer
Frank Keith
Mary Mozingo
Patrick Morris
Dan Neal
�..
draft 6/8/95 5:00pm
REMARKS BY PRESIDENT WILLIAM JEFFERSON CLINTON
REDUCING BURDENS ON SMALL BUSINESSES
TREASURY DEPARTMENT·
JUNE 9, 1995
[Acknowledgements: Paul Condit, introduction; Vice President
Gore; Secretary Rubin; Commissioner Chater; Commissioner
Richardson; Deputy Secretary Glynn, and friends.]
I want to thank Paul Condit for his vivid explanation of the
problem faced by so many small businesses. I'm sure he'd like to
take one of his John Deere tractors and just plow all the
unnecessary paperwork away. But, his tractors were built for
farming, not· for clearing away excess paperwork. The government
created his problem, and it's up to the government to solve it.
I ran for President because I wanted to make government work
better fo
e· n people. I believe we need a government
that shrinks bureaucrac and increases opportunity. __ One that
empowers pe
e o rna e the most of their own lives. And one
that enhances security at home and abroad.
The key to our future is to create more opportunity, but also to
have all of us assume more responsibility. That's what all of
you are doing. Business is the engine that powers the American
Dream. And small business is truly the backbone of our economy.
Small businesses employ more than 60 percent of our people, and
create more than half of what we sell. So, we owe it to you to~~/lt
make sure government is a partner, not an impediment.
C~.
That's why I created the National Performance Review and put Vice
President Gore in charge. For the past two years, he and his
team have made remarkable progress in improving the way
government serves the American people. we--trai/'F(j-ramatically
re.dtlced the si:?.e of government
eliminating more thafi---1-0-G-,000
~70f"
positions. We have cut bureaucracy and red tape. We have
'1
streamlined and consolidated services. A few weeks ago, I signed
the Paperwork Reduction Act to ease the paperwork burden
throughout the Federal government. But, we must do more,
especially for businesses.
That's why we're here today. Paul Condit is not alone. We
continually hear from businesses about the cost of complying with
government rules. For years, small and big businesses have been
telling Washington to "get real" about the absurd, frustrating,
and costly paperwork burdens that have been placed on you.
You've been sending the same wage and tax information to a number
of different government agencies so they could each have their
own special report. It has been very convenient for the
government. Now it's government's turn to be convenient for
business owners.
·
1
�·-
I have asked the Department of Treasury, specifically IRS, and
the Department of Labor, along with the Social Security
Administration to form a partnership to cut through this mountain
of paperwork. The Department of Treasury has taken the lead by
spearheading the Simplified Tax and Wage Reporting System. As a j~
result of their work, today we are announcing a plan tD eliminate-~
the need to file W-2 data in multiple places. You will only need O~~ ~
to file once and you will have a single point of contact for
~~
customer service. This will save time. This will save hassle.
~ ~
This will save money --·almost $1 billion annually. When we free~
you from the burden of paperwork, you can do what you do best -~
create jobs, opportunity, services and products for the American
b
people.
·
In addition, I will be sending legislation to Congress that will
remove the legal barriers that keep Federal and State agencies
from working together in a common sense way to ease the paperwork
burden on all taxpayers.
This is the kind of service you should expect from a modernized
tax system -- a system that is designed for your convenience.
That is what government reinvention is all about
making
government work better and cost less for you.
I would now like for Treasury Secretary Rubin, Deputy Labor
2
WV-(tf~~
~~~·
�Secretary Glynn, SSA Commissioner Chater, and IRS Commissioner
Richardson to come up and sign a pledge to work toward those
goals.
[Rubin, Glynn, Chater, and Richardson sign the pledge]
And, now I'd like to ask Paul Condit, as small business owner and
taxpayer, to sign as a witness.
[Paul Condit signs and
sta~ds
3
with President for photo]
�·-·. "d
~-·
r-
Uivision
�draft 6/8/95 1:00 pm
REMARKS BY PRESIDENT WILLIAM JEFFERSON CLINTON
REDUCING BURDENS ON SMALL BUSINESSES
TREASURY DEPARTMENT
.JUNE 9, 1995
[Acknowledgements: Paul Condit, introduction; Vice President
Gore; Secretary Rubin; Commissioner Chater; Commissioner
'
Richardson; Deputy Secretary Glynn, and friends.]
I want to thank Paul Condit for his vivid explanation of the
problem faced by so many small businesses. I'm sure he'd like to
take one of his John Deere tractors and just plow all the
unnecessary paperwork ~way. But, his tractors were built for
farming, not for clearing away excess paperwork. The government
_
created his problem, and it's up to th.e government to soLJ'_D~,~~
That's why we're.here.today. Paul Condit is not alone. T~~
~
a-v-e-r-a<§'·e-GG-mpa-H.-y-l-R-t.l:l-l-S-G&l±R·'E-F-y-s-f>·e·fl:ei·s-x·x-:fo·r-eve-r·y-e·I'l.·e-e·f-1-t'S
Pt
smp.J.~s-:j"tl's~e-eem:@~Y with g<?vernment. rules. T'fi,e=€®S·~i..s-tar ~~,.... . \
~'e=~f;o~r~I.J-5&cpiflRi:l.·B·2.e:s-"-:=::.....B.us,;L~l'le·s·s·es=w-reh=f'ewe'r~t'h'a'r:=s
1v.l)'~
emp.l,o...y.e.e<S-S·:f>e·B·a=eMe-r-=-xTx--f)e·r=emf)J.e.y.ee-e.v.e.r..y=-yea•r-"'"f~rqu'r':L"R'g-e•bbt,••a;E.he ''-~ ·~ l{.n.
=--Eil:l"l='e~s=a•nd=ri=-l"'rrng=c:rtl't-==-t<l:H~=-:&e..J;:ms,..
Eighty perc en~ fa~' burden
~v:.ES-s-s.e·Fl:ei-i·Fl'ey-wa-<3-e-a·rrd-eax-i~R·Pe·:r:-ma·'I:-1®·R....,i,a-Gl.upUc.
f...J.?J-v....;
Go -s +~#ea·ee-a·f.l.Gi-€{·B.·a~P1:1p-ili--~e·a·t:e"""'Pef>0'l:'I:-S='t'o>=Fe·de;r;;acl;..,.,.,.,.s,-e.a·'E>e;--a-:r:re-1e.c;;.q,l 6 P ,
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.
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For years, small and big businesses have been telling Washington
to get real about the absurd, frustrating, and costly \,paperwork
burdens that have been placed on .you. You've been sendillg-th~----- ~(
same information to a· nu~er of dif~erent government agencies so
-~ \(~
they could each have the1r own spec1al report. It has been very ~-il'
convenient for the governmen.t. Now it's government's turn to be
~6c.._~
convenient for business owners.
r~~d~~l
11
11
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I have asked the Department of.Treasury, specifically IRS, and
the Department of Labor, along with the Social Security
Administration to form a partnership to cut through this mountain
of paperwork. The Department' of Treasury took the lead by
spearheading the Simplified Tax and Wage Reporting System
program. As a result of their work, we are today announcing a
plan to eliminate the need to file W-2 data in multiple places.
You will only need to file once and you will have a single point
of contact for customer service. This will save time. This will
save hassle. This will save money -- almost $1 billion annually.
We want to fiee you from the burden of a mountairi of paperwork so
you can do what you do best -- create jobs, opportunity, services
and products for the American people.
In addition I will be sending legislation to Congress that will
remove the legal barriers that keep Federal and State agencies
from working together in a common sense way to ease the paperwork
1
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�burden on all taxpayers.
If you are like most taxpayers, you currently have to fill out
both a Federal and a State income tax form. And depending on ·
where you live and work, you might also have to do a city income
tax form.
Most of the information on the state and city forms is a repeat
of what's on the Federal form. So, with some teamwork and modern
technology, the Federal government is going to create
partnerships with state and city governments to eliminate the
need for duplicate filings. We envision a Federal/State joint
electronic filing system that allows taxpayers to satisfy both
their Federal and State filing requirements with a single
electronic transmission. Twenty-nine states participated in
joint electronic filing in 1995, with more than 1.5 million
returns filed. We are expanding the program to 32 states in
1996. The Treasury Department estimates that with participation
by 20 percent of states, by the year 2000, we can reduce the
burden to taxpayers by $1.5 billion and increase revenues by $315
million.
This is the kind of service you should expect from a modernized
tax system -- a system that is designed for your convenience.
That is what government reinvention is all about -- making
government work better and cost less for you. And let me say
that the Department of Treasury and the Department of Justice
have demonstrated the worth of teamwork. to improve results with
the indictment of major Cali Cartel figures in Miami a few days
ago.
The measures we are taking today, will build on the success of
this and other reinvention efforts. My Administration will clear
away the barriers to partnership with State and local
governments. I invite governors and mayors across the nation to
join us in achieving single reporting for all businesses, and
single filing for all taxpayers. This is the right way to fix
government -- to redesign it to better serve citizens in
partnership with states and cities.
I would now like for Treasury Secretary Rubin, Deputy Labor
Secretary Glynn, SSA Commissioner Chater, and IRS Commissioner
Richardson to come up and sign a pledge to work toward those
goals.
[Rubin, Glynn, Chater, and Richardson sign the pledge]
And, now I'd like to ask Paul Condit, as small business owner and
taxpayer, to sign as a witness.
[Paul Condit signs and stands with President for photo]
2
�DRAFT 6/7/95 2:30 P.M.
PRESIDENT WILLIAM J. CLINTON
REMARKS TO WHITE HOUSE CONFERENCE ON SMALL BUSINESS
WASHINGTON HILTON, WASHINGTON, D.C.
JUNE 12, 1995
Acknowledgments tk.
I am proud to convene this 1995 White House Conference on Small
Business. This is an important moment in history, since only
three such conferences have been held since our nation was
founded, and this is the last one of the 20th century. I thank
the members of Congress and the American citizens of both parties
who helped make today possible.
In the past, these conferences have produced landmark legislation
-- from the Paperwork Reduction Act to the Regulatory Flexibility
Act. I am determined that this year we will add even more luster
to that record. To do that, we have been listening to you. The
reforms I want to talk with you about today grow out of the ideas
and recommendations you,ve shared with us at the state
conferences this past year. I hope you,ll be as pleased as I am
with what your hard work and good advice has helped us achieve.
As civilized as things look out there today, this conference has
had quite a past. You know as well as I do that owners of small
businesses have minds of their own. There was actually a trial
run for this conference back in 1938 -- under President
Roosevelt, and it was held at the Commerce Department. Just after
the morning session started, the participants became so
argumentative that Commerce Department guards had to be called in
to quiet things down. An inventor from Philadelphia became so
rowdy that D.C. police had to remove him from the room, put him
in a "hammerlock, 11 give him a "finger-twist," and assign three
officers to keep him quiet.
I guess you can understand why they gave these conferences a
rest. Today,s entrepreneurs are still mavericks, just as unlikely
to run in a herd .as their counterparts were 50 years ago. But
fortunately, they,re somewhat less unruly. I,m betting you all
will make it at least to the lunch break.
One thing no one here is going to argue about -- one belief we
all share
is that there is no such thing as a small business.
No business, regardless of the number of employees, ever feels
small. If you,re trying to make the finest products and offer the
best services around, if you,re taking care of the millions of
details your business depends on to thrive -- well, then it seems
like the biggest enterprise imaginable.
1
�You all know that there are unique rewards that can come only
from building your own business. You all know, too, that there
are times when it feels as if the weight of the world is on your
shoulders. That's why I've worked so hard during the last two
years to make your burden lighter -- to make it easier for you to
focus on the business of growing your business.
When I came to Washington, our administration dedicated itself to
sparking a broadbased economic recovery. We knew we needed to get
our fiscal house in order and reduce the deficit. We knew we
needed to invest in the skills of our people and the technologies
of the future. We passed NAFTA and GATT in order to open markets
and create more jobs. We fought to reinvent the way government
does the people's business, and to reduce its size to the
smallest it has been since the Kennedy Administration.
Our hard work is paying off. To be sure, there's a great deal
left to do. But you can't argue with the facts: the economy is
healthy; inflation is moderate, trade is expanding; interest
rates and unemployment are down. We grew 3.5 million new jobs
last year. We are cutting the deficit by $1 trillion over seven
years. In fact, we have reduced it for three years in a row for
the first time since Harry Truman was President.
We have done our level best to make sure our growing economy is
one that small business can take advantage of. This goal makes
sense for you, of course, but it makes great sense for the
country as well. While the big corporations get a lot of
attention, let's not forget that it is small business that
employs 60 percent Of our people. It is small business that is
responsible for creating more than half of what we produce and
sell.
It makes sense for another reason, too. I look around this room
and I see the promise of American life: people who decided for
themselves that they were going to make the most of their Godgiven potential. There are people in this room today who hit
their heads against the glass ceiling, and would not put up with
that blow. So they went out, and started a business of their own.
There are people here who ran into the cold, hard wall of racism,
and would not put up with that injustice. So they went out, and
started a business of their own. There are people here who got
fed up with a workplace that saw them as functionaries rather
than visionaries. So they went out, and started a business of
their own. People in this room were determined to put themselves
in a situation where their success depended entirely on their
talent, their brains, and their willingness to work their hearts
out to make their dreams real.
That's why it gives me such pleasure to read the numbers: more
new businesses were created in 1994 than in any previous year.
And more are staying alive. In the last two years, business
2
\
�r - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -------
failures and bankruptcy
filing~
have plummeted.
We're doing everything we can to accelerate this trend. Almost
every small business in America is now eligible for tax relief.
We dramatically increased the amount you can deduct for equipment
expenses. We extended the Research and Experimentation tax
credit. We've made it easier for all businesses -- not just large
ones -- to sell their products to the government. To help you
market your goods around the world, we scrapped export controls
and expanded export assistance.
Our Small Business Administration -- a leaner, more invigorated,
more committed Small Business Administration -- has spearheaded
all this good work. When I ran for President, I had two main
goals for the SBA. Find a way to end the credit crunch for small
business. And find a way to free smail businesses from
burdensome, outdated government regulations.
With your help and advice, we've made it infinitely easier for
you to borrow money to grow your business. We .revised banking
regulations to encourage lending to smaller firms. These steps,
combined with declining interest rates, resulted in an 80 percent
increase in lending to businesses like your own.
In the last two years, the SBA has expanded the 7(a) loan
guarantee program by 30 percent: from 27,000 loans in 1992 to a
projected 56,000 loans in 1995. We increased the number of loan
guarantees to women from 14 to 21 percent. Loans to minority
entrepreneurs grew by almost 60 percent. And the program is not
just bigger, it's better
with fewer forms, faster turnaround
and savings to taxpayers of $273 million.
The SBA has also been on the frontlines in reforming our
regulatory system and reinventing government. At the SBA,
housecleaning started at home. We consolidated field offices and
shrunk the loan form from an inch to a single page.
The Vice President just told you about what we've done across the
board -- from the Environmental Protection Agency to the
Department of Agriculture. In fact, last Friday we announced an
initiative that will allow you to report wage and tax information
to one place. Instead of sending the same data to 15 different
agencies, just send it to one, and we'll do the rest.
There's more good news. I'm pleased to announce that we've just
made the regulatory burden lighter. Specifically, XX pounds
lighter -- that's XX pages of federal regulations. Instead of
worrying about these XX pages, you will be able to focus on XX
ways to make your business better. You'll be freer than ever
before to go about the business of growing your business.
3
�This is the result of months of hard work. Less than five months
ago I instructed our agencies to go over every single government
regulation. I asked for reports on what should be cut,
streamlined, and kept. They delivered. XX percent of regulations
are history now. [need nutty examples here] More importantly, XX
percent are being changed to make them work better.
It's the "working better" part of this process that makes me
particularly proud. It's easy to junk crazy, outdated
regulations. What's harder is to take useful regulations that
have become tangled up over the years, and untangle them.
We depend on sound regulations to make sure that our air and
water are clean, that the toys our kids play with are safe, that
the food we eat won't make us sick. But no one in this room
should have to be driven nuts by a truck-load of forms, or caught
between conflicting government rules, in order to comply with the
law of the land.
I believe strongly in regulatory reform. But there's a right way
to do it, and there's a wrong way. What many in the new Congress
want to do is just plain wrong. They want to use regulatory
reform as an excuse to roll back our proven public health and
safety record. Their so-called "reforms" would stop government
from being able to move a muscle to protect our people. That's
not reform-- that's rigor mortis.
Far-sighted reform brings common sense back into our regulatory
system without stripping away the safeguards that protect us all.
It defends people, not bureaucracies; promotes results, not
rules. Government can be as innovative as the best of our private
sector businesses, and under my administration it will be.
Here is proof that we mean business. Today I want to announce
that we are reforming the regulations governing pension plans in
the United States -- and not a moment too soon.
The pension laws enacted twenty years ago with the best of
intentions are now so complicated that you need a SWAT team of
actuaries, lawyers and accountants to help you fill out the forms
and comply with the rules. Running these plans takes so much time
and costs so much that only 24 percent of small businesses .have
them: Most just give up. Who can blame them?
Simple, streamlined pension plans, however, are good for
everyone: for small businesses, because they boost morale and
give people a stake in your company; for workers, because they
encourage savings, and we need to do everything we can to see to
it that more Americans save for the future.
So this is what we're going to do. We are going to start a
National Employee Savings Trust, a simplified pension plan for
small business. Under this plan, if you guarantee your employees
4
�a certain contribution, we'll exempt you from the complex
antidiscrimination rules that make sure everyone is compensated
fairly.
Same for the smallest businesses -- those with 100 or fewer
employees. In exchange for guaranteed contributions to employeemanaged IRAs, we'll free you from the burden of
antidiscrimination testing.
We're going to stop punishing families from working together by
getting rid of the family aggregation rule. This rule, which
treats family members as a single entity, dishonors the hard work
of individuals, and is a drag on that great American institution:
the family business.
There is currently a seven-part test to determine ~hether or not
someone is a "highly compensated employee." That's nuts. All we
need is a simple definition: a highly compensated employee either
owns 5 percent of the business or is paid more than $80,000 a
year. Easy as that.
We can do all this without opening the system to abuses: many of
the rules we're getting rid of were duplicates. Safeguards for
fair play are still in place.
There's much more to this reform, but the bottom-line is this:
pensions for you and your employees, simpler math, shorter forms,
more dollars devoted to the life-long well-being of all
Americans.
That's good for you, it's fair to your hard-workers, it's great
for business. And, to paraphrase a predecessor of mine, one who
never had the pleasure of convening a Small Business Conference,
what's good for small business is good for America. We made
promises to you. And we're meeting them. Stay tuned.
Thank you and God bless you.
5
�
Dublin Core
The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/.
Title
A name given to the resource
Terry Edmonds
Creator
An entity primarily responsible for making the resource
Office of Speechwriting
James (Terry) Edmonds
Date
A point or period of time associated with an event in the lifecycle of the resource
1995-2001
Is Part Of
A related resource in which the described resource is physically or logically included.
<a href="http://clinton.presidentiallibraries.us/items/show/36090" target="_blank">Collection Finding Aid</a>
<a href="https://catalog.archives.gov/id/7763294" target="_blank">National Archives Catalog Description</a>
Identifier
An unambiguous reference to the resource within a given context
2006-0462-F
Description
An account of the resource
Terry Edmonds worked as a speechwriter from 1995-2001. He became the Assistant to the President and Director of Speechwriting in 1999. His speechwriting focused on domestic topics such as race relations, veterans issues, education, paralympics, gun control, youth, and senior citizens. He also contributed to the President’s State of the Union speeches, radio addresses, commencement speeches, and special dinners and events. The records include speeches, letters, memorandum, schedules, reports, articles, and clippings.
Provenance
A statement of any changes in ownership and custody of the resource since its creation that are significant for its authenticity, integrity, and interpretation. The statement may include a description of any changes successive custodians made to the resource.
Clinton Presidential Records: White House Staff and Office Files
Publisher
An entity responsible for making the resource available
William J. Clinton Presidential Library & Museum
Extent
The size or duration of the resource.
635 folders in 52 boxes
Text
A resource consisting primarily of words for reading. Examples include books, letters, dissertations, poems, newspapers, articles, archives of mailing lists. Note that facsimiles or images of texts are still of the genre Text.
Original Format
The type of object, such as painting, sculpture, paper, photo, and additional data
Paper
Dublin Core
The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/.
Title
A name given to the resource
6-9-95 REGO (reinventing govt) Washington, DC [1]
Creator
An entity primarily responsible for making the resource
Office of Speechwriting
James (Terry) Edmonds
Identifier
An unambiguous reference to the resource within a given context
2006-0462-F
Is Part Of
A related resource in which the described resource is physically or logically included.
Box 28
<a href="http://www.clintonlibrary.gov/assets/Documents/Finding-Aids/2006/2006-0462-F.pdf" target="_blank">Collection Finding Aid</a>
<a href="https://catalog.archives.gov/id/7763294" target="_blank">National Archives Catalog Description</a>
Provenance
A statement of any changes in ownership and custody of the resource since its creation that are significant for its authenticity, integrity, and interpretation. The statement may include a description of any changes successive custodians made to the resource.
Clinton Presidential Records: White House Staff and Office Files
Publisher
An entity responsible for making the resource available
William J. Clinton Presidential Library & Museum
Format
The file format, physical medium, or dimensions of the resource
Adobe Acrobat Document
Medium
The material or physical carrier of the resource.
Reproduction-Reference
Date Created
Date of creation of the resource.
12/9/2014
Source
A related resource from which the described resource is derived
42-t-7763294-20060462F-028-001-2014
7763294