Title: A bill to direct the Secretary of the Treasury to report on tax compliance with respect to non-employer business income, and for other purposes.
Policy area: Taxation

Summary:
This bill requires the Department of the Treasury to study and report to Congress regarding tax compliance with respect to non-employer business income. The report must include an evaluation of: (1) whether there is significant over-reporting of non-employer business income due to underutilization of allowable deductions and other tax benefits; (2) the current tax withholding, reporting, and filing systems; and (3) changes over time in the earning of wage income and non-employer business income.

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[S. 3097 Introduced in Senate (IS)]

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115th CONGRESS
  2d Session
                                S. 3097

  To direct the Secretary of the Treasury to report on tax compliance 
 with respect to non-employer business income, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             June 20, 2018

  Mr. Warner introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
  To direct the Secretary of the Treasury to report on tax compliance 
 with respect to non-employer business income, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. FINDINGS.

    Congress makes the following findings:
            (1) Contingent and alternative work arrangements play a 
        significant role in our economy and our labor force.
            (2) More information about those in contingent and 
        alternative work arrangements would lead to better policymaking 
        in areas affecting this population.
            (3) The Census Bureau defines a non-employer business as a 
        business which has no paid employees, has annual business 
        receipts of $1,000 or more ($1 or more in the construction 
        industry), and is subject to Federal income taxes.
            (4) Studying non-employer business income should provide 
        some insight into the tax situation of contingent and 
        alternative workers, and shifts between wage and non-employee 
        business income over time.
            (5) Tax compliance for non-employer businesses is more 
        complex as compared to compliance with respect to wage income, 
        and could be made easier through updates to the withholding, 
        reporting, and filing regimes.
            (6) While the release of the Bureau of Labor Statistics' 
        preliminary findings of the Contingent and Alternative Work 
        Arrangement Supplement to the Current Population Survey 
        provided valuable information about this workforce, it also 
        left unanswered questions about workers who use contingent or 
        alternative work arrangements to supplement their income from 
        more traditional arrangements.
            (7) Additional analysis by the Department of the Treasury 
        could shed further light on these issues.

SEC. 2. STUDY AND REPORT.

    (a) In General.--The Secretary of the Treasury (or the Secretary's 
delegate) shall conduct a study and prepare a report to the Committee 
on Finance of the Senate and the Committee on Ways and Means of the 
House of Representatives which evaluates--
            (1) tax compliance with respect to non-employer business 
        income, including whether there is significant over-reporting 
        of non-employer business income due to underutilization of 
        allowable deductions and other tax benefits (if feasible, 
        reported separately for income earned through online and mobile 
        platforms and income earned by other means);
            (2) the current tax withholding, reporting, and filing 
        systems to identify how they could be updated to reflect the 
        growing numbers of workers earning non-employer business 
        income; and
            (3) how the earning of wage income and non-employer 
        business income has changed over time, specifically, dividing 
        by income decile and analyzing at least the most recent 10 
        years of available tax filing information including--
                    (A) the percentage of taxpayers who earn wage 
                income but do not earn non-employer business income;
                    (B) the percentage of taxpayers who earn non-
                employer business income but do not earn wage income;
                    (C) the percentage of taxpayers who earn both wage 
                income and non-employer business income; and
                    (D) among those earning both wage income and non-
                employer business income, dividing by income decile, 
                the average percentage of such taxpayers' income which 
                comes from each category (if feasible, reported by 
                separating capital asset income from other forms of 
                non-employer business income).
    (b) Report.--The report required by subsection (a) shall be 
provided not later than September 30, 2019.
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