WASHINGTON, D.C. – Chief Counsel for Advocacy Thomas M. Sullivan today commended Representative Charles Gonzalez (D-TX) for introducing the Home Office Tax Deduction Simplification and Improvement Act (H.R. 7074). The bill will simplify the home office deduction by introducing a standard deduction for small business owners. It is companion legislation to S. 3371, introduced earlier this year by Senator Olympia Snowe (R-ME).

In a letter to Representative Gonzalez, Chairman of the Regulations, Healthcare, and Trade Subcommittee of the U.S. House Small Business Committee, Sullivan said that he supported the measure and commended the Representative’s introduction of the bill. Sullivan wrote, “H.R. 7074 will address the issue [home office deduction] legislatively.”

Members of the small business community frequently appeal to the Office of Advocacy for relief from tax requirements that are disproportionately burdensome. According to research from Advocacy, tax compliance is 67 percent more burdensome for the smallest businesses compared to their larger competitors. Tax complexity, combined with the fact that 53 percent of America’s small businesses are home-based, prompted Advocacy’s support for H.R. 7074.

Last year, as part of Advocacy’s Regulatory Review and Reform (r3) initiative, the National Association for the Self Employed (NASE) and others identified the home office deduction as a tax provision that is unduly complex. Advocacy agreed with the NASE and named the deduction as a 2008 r3 Top 10 Rule for Review and Reform.

In July, Chairman Gonzalez held an oversight hearing on “Regulatory Burdens on Small Firms: What Rules Need Reforms?” that examined the 2008 r3 Top 10 Rules for Review and Reform. The hearing, at which Chief Counsel for Advocacy Sullivan testified, focused on the need for reform of the home office deduction.

The Office of Advocacy, the “small business watchdog” of the federal government, examines the role and status of small business in the economy and independently represents the views of small business to federal agencies, Congress, and the President. It is the source for small business statistics presented in user-friendly formats, and it funds research into small business issues.