The Office of Advocacy, a federal "watch dog" agency under the U.S. Small Business Administration (SBA) constantly reviews the processes and performances of certain standards and regulations that affect small business owners. Each year, it publishes a list of recommendations under their Regulatory Review and Reform, known as the “r3” program of the top ten areas that the SBA feels need to be improved to help small businesses.
The r3 was created by, and is conducted through the Office of Advocacy to assess the effectiveness of existing federal recommendations regarding small business owners. Its findings draw upon the opinions submitted by small business owners and resulting recommendations are then reported by the Office of Advocacy to appropriate federal agencies.
According to the National Women’s Business Council:
- Federal regulations represents $1.1 trillion per year costing home business owners more per household than the cost of health insurance; and
- Small businesses annually pay 45 percent more per employee to comply with federal regulations than big businesses do.
The 2008 “top 10 r3” number one recommendation for change made the SBA was to simplify the home business deductions for small business owners. The SBA reports that the current methods for calculating home office deductions are confusing and have not been updated to include important deductions associated with changes in technology used by home-based businesses.
According to the SBA many business owners who work from home do not understand how, and if they qualify for certain home office deductions, and therefore do not report them on their taxes. The SBA Office of Advocacy has recommended to the IRS, that it should change its standards to allow home office tax payers a choice of using existing rules or have the option of choosing an easier “standard deduction.” Stakeholders can nominate changes and make recommendations for reform online, or of contact Keith Holman at the Office of Advocacy, 202-205-6936 or email at advocacy@sba.gov. The closing date to make recommendations to be posted in 2009 is December 31, 2008.
