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BPAA Federal Policy Update - May 7

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  • IRS Video Portal is One-Stop Shop Featuring Tax Information for Small Businesses: For small business owners who have tax-related questions, the IRS Video Portal offers a series of videos and webinars that can help them find answers. Business owners can access the portal to find information on topics such as:
  • Starting a Business
  • Business Income
  • Employers
  • Filing and Paying Taxes
  • Small Business Taxes
  • The IRS also posts videos on the portal for individuals, tax professionals, governments, and charities and non-profits.
  • Some Small Employers Get Break on Health Coverage Tax Credit: Small employers may still be able to claim a health insurance tax credit if the absence of an Obamacare small-business marketplace in their area meant they couldn't meet requirements to get the break. Businesses that were located in counties where health coverage through the Small-Business Health Options program wasn't available in 2016 and 2017 can now qualify for the tax credit if they meet certain conditions, the IRS said April 27. The tax code allows small employers—defined as those with fewer than 50 employees—that provide health insurance coverage to their employees through SHOP exchanges to qualify for a tax credit. Though the marketplaces were available in many areas of the country, some counties didn't have available coverage in 2016 and 2017. The IRS provided a similar relaxation of the rules in 2015 and 2016 to employers in Iowa and Wisconsin when there wasn't coverage available to employers in parts of those states. The April 27 guidance doesn't affect previous exceptions to the tax credit rules, the IRS said.

Pass-Through Entities Hesitant to Convert to Lower-Tax Status: Partnerships, S corporations and limited liability companies are hesitant to convert to C corporations because they doubt the lower taxes levied by the new tax law will persist, Bloomberg Law’s Laura Davison reports. New law cut corporate tax rate to 21% from 35%, pushing many pass-through entities to explore conversion; pass-throughs funnel income to investors who pay tax on their individual returns.


  • Dems demand end to waivers used to pay people with disabilities below minimum wage – Half a dozen Senate Democrats are calling on the Department of Labor to crack down on employers paying people with disabilities less than the federal minimum wage. In a letter to Labor Secretary Alexander Acosta, Sen. Elizabeth Warren (D-Mass.) and other senators asked for information on the practice of issuing 14(c) certificates, waivers allowing employers to give “subminimum wages” to workers with disabilities. "These waivers are inherently discriminatory and should be phased out in a responsible way," the letter reads. ”While the Department continues to issue these waivers, however, we are concerned by past abuses of the program and hope to better understand the extent to which the Department is able to prevent employers' mistreatment of and discrimination against workers with disabilities." The senators noted in the letter that as of January, more than 150,000 workers nationwide were eligible for subminimum wages. They argued that the practice, allowed under a section of the Fair Labor Standards Act, “unjustifiably sets low expectations for workers with disabilities.” In some cases, they noted that employees are earning as low as 16 cents per hour. The senators asked Acosta for information on a number of issues related to the waivers, wages and oversight for the practice no later than May 11.
  • New Benefits Agency Head Focuses on Businesses in Early Days - Assistant Secretary of Labor Preston Rutledge met mostly with businesses and industry groups in his first two months as head of the Employee Benefits Security Administration, according to Rutledge's schedule, obtained by Bloomberg Law through a Freedom of Information Act request. The schedule listed meetings between Rutledge and Fidelity Investments, Prudential Financial, Aflac, Charles Schwab, eBay, UPS, United Healthcare Group, Uber, and Lyft, among others. He also had meetings scheduled with business interest groups like the American Benefits Council, the U.S. Chamber of Commerce, and the ERISA Industry Committee--known as ERIC. Labor wasn't completely left out of the mix, however. Rutledge and Secretary of Labor Alexander Acosta had a meeting scheduled with the president of United Food & Commercial Workers International Union, according to the schedule documents. Rutledge was tax and benefits counsel to the Senate Finance Committee and top adviser to Committee Chairman Sen. Orrin Hatch (R-Utah) before being tapped to lead the EBSA. Rutledge's business-focused schedule of initial meetings differs from Acosta's initial meeting schedule, which balanced industry- and labor-related meetings. The DOL didn't provide a comment about whether the schedule accurately reflected Rutledge's goals or what his goals will be going forward.

Small Employer Health Plans Top Agenda - The Labor Department's proposed rule to expand association health plans was a topic of multiple meetings on Rutledge's schedule. The meetings about the rule began as early as his first week. The rule would make it easier for small businesses and independent contractors to join health plans. He met with Sen. Rand Paul (R-Ky.), who's been vocal in his support of the association health plan rule. Paul recently told Bloomberg Law that the rule, which was introduced in January, could be finalized before July. Meetings with the Washington Farm Bureau, UnitedHealth Group, and the IHC Group addressed the proposed rule, the schedule indicates. The three groups also submitted comment letters on the proposed regulation.


NCAA TO VOTE ON BEER, WINE” – Approval would mean sales in public spaces at some championship events. NCAA officials will vote this summer on whether to approve beer and wine sales in public spaces for the 2019 Final Four men’s basketball tournament. L.J. Wright, director of the Division I men’s basketball championship, confirmed the timetable for VenuesNow, although the exact date of the vote is unclear. The vote on the measure extends to committees overseeing 23 sports across the NCAA’s three divisions. All told, the NCAA oversees 90 championship events. Not all events would be affected by the move, Wright said. “If it passes, we’ll be working with each of the host venues to determine whether they’ll be able to do it,” he said. “It all depends on their capacity to serve alcohol. Some serve it on a regular basis and some do not. A lot depends on if the venue already sells alcohol.” The vote comes after the NCAA Board of Governors last fall eliminated the association’s longtime policy prohibiting alcohol sales at NCAA postseason events. The serving of alcohol had been restricted to premium areas at those events.


Report: Cheating Is Becoming A Big Problem In Online Gaming” – In the gaming industry there is a sub-economy for cheaters. They can purchase all kinds of digital tools to get around game rules, and even modified code to acquire special powers, like maximum vision or accuracy for shooters, or magic bullets that turn around corners. How prevalent is this problem, and why is it so? A new study by Irdeto, a cybersecurity services firm for the media and entertainment industry, provides some novel revelations about the problem. The company surveyed 9,436 consumers and online gamers in China, Germany, Japan, South Korea, UK, and the US. Whether socially accepted, tolerated, or induced, cheating behavior is now massive, according to the survey. A total of 37% of gamers confessed to cheating (3% "always", 9% "often", 13% "sometimes", and 12% "rarely"). And given there was no incentive compatible mechanism in the survey to ellicit full honesty (other than the option "prefer not to say" which is like pleading the 5th), I am going to bet it's higher than 40%. Of the online gamers, only 12% have never had their multiplayer gaming experience negatively impacted by other players cheating. In other words, about 9 in 10 players have had a negative experience because of cheaters. 


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