Model Letter of Support from Town

The Honorable XXX
XXX House Office Building
Washington, D.C. 20515

Re: Requesting Co-Sponsorship for H.R. 6603

Dear Representative XXX:

On behalf of YOUR COMMUNITY NAME and the National Association of Towns and Townships, I respectfully request that you cosponsor H.R. 6603, The Local Officials Tax Relief Act.

On June 24, 2007, Representatives Early Pomeroy, Patrick Tiberi, Stephanie Herseth Sandlin, and Timothy Walberg introduced this measure that would amend the Internal Revenue Code (IRC) to exempt small payments to public officials from FICA (Social Security and Medicare) tax withholding and reporting requirements. Communities across the country rely on citizens to provide essential services to their communities. That includes public officials - elected and appointed officials that serve on local governing boards, commissions and committees - who make vital decisions for and contributions to our communities. Many of these public officials receive minimal compensation for their service, but under recent federal interpretation of the federal IRC and the Social Security Act, these small payments are classified as "employment wages" and subject to FICA withholding and reporting requirements. The withholding and reporting burden on small local governments associated with these tax requirements is substantial. In many cases, the tax processing fees we incur are greater than the tax revenue provided to the federal government.

Currently, election workers who are compensated less than $1,300 a year are excluded from the IRC's definition of "employment" FICA tax purposes. H.R. 6603 would expand that exclusion to include local public officials who are compensated less than $1,300 a year. Local governments would still be required to provide the minimally compensated public officials with a 1099 tax form, but would avoid the burdensome and expensive FICA withholding and reporting requirements. Individuals that receive payment for their public service capacity will still be required to report this income for federal tax purposes.

This bill is very important to the communities in the XXX DISTRICT, as we rely heavily on these citizens to make important decisions for and contributions to our communities. However, small local governments like ours bear a large burden when those citizens receive minimal compensation.

If you are interested in co-sponsoring H.R. 6603, please contact Diane Oakley in Representative Pomeroy's office at 202.225.2611 or Adam Francis in Representative Tiberi's office at 202.225.5355. Thank you for your attention to this matter, and as always, thank you for your continued leadership on behalf of the XXX DISTRICT.

Sincerely,

Cc:
Jennifer Imo, National Association of Towns and Townships (Via Facsimile: 202.331.1598)
Diane Oakley, Representative Earl Pomeroy (Via Facsimile: 202.226.0893)
Adam Francis, Representative Patrick Tiberi (Via Facsimile: 202.226.4523)