VSCPA Expresses Concerns Regarding Virginia HB 177 to Disqualify Seasonal Tax Preparation Employees from Receiving Unemployment Compensation

February 10, 2010

The Honorable Kathy J. Byron
Room 811 - General Assembly Building

A personal letter to all members of the House Commerce and Labor Committee; Sub-committee #1

Re: HB 177 (Morrissey) Seasonal tax preparation employees; disqualifies employee from receiving unemployment compensation.

Dear Delegate Byron:

I am writing on behalf of the 9,000 members of the Virginia Society of Certified Public Accountants (VSCPA) regarding the VSCPA’s opposition to HB 177 as introduced to disqualify seasonal tax preparation employees from receiving unemployment compensation.

The VSCPA does not oppose placing a limitation on the ability of seasonal employees to collect unemployment compensation, a position which would be consistent with several other states. However, we have the following specific concerns about this legislation as introduced:

  • The bill is silent as to how the seasonal employees are to be treated for compensation purposes.
  • The bill only mentions unemployment compensation and does not address income tax withholding.
  • The bill does not specify whether the employers would be required to pay unemployment taxes on such individuals.
  • The bill does not specify whether these individuals would be considered independent contractors or employees, which may be contrary to some holdings of the Internal Revenue Service (IRS).
  • The bill limits the tax preparation season period to run through April 15, even though the Virginia filing deadline is May 1.
  •  It is unclear how the new IRS tax preparer registration program would affect these individuals.
  • The bill does not address how IRS Enrolled Agents would be impacted.
  • Section 530 of the 1978 Revenue Act, which is currently under consideration in the U.S. Congress, has a contrary view regarding the treatment of these individuals. If this bill passes, it would create another non-conformity issue.
  • It is unclear why CPA firms are exempt. Some CPA firms are only tax preparation firms and perform no other services. If there is intent to provide relief to employers by not requiring them to pay unemployment taxes on such individuals, then CPA firms should not be excluded.

In light of these concerns, the VSCPA requests that this legislation not be allowed to proceed without significant amendments to address these issues. Thank you for your consideration and please do not hesitate to contact VSCPA Government Affairs Director Emily Walker at ewalker@vscpa.com or (804) 612-9428 if we can be of any assistance to you on this or any other matter facing the Commonwealth.

Sincerely,

 

James K. Walker, CPA
Chair, VSCPA Board of Directors

Cc:      Del. Joe Morrissey
            Bill Axselle
            Travis Hill

LAST UPDATED 2/10/2010

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