The American Institute of Architects (AIA) has joined a coalition of more than 60 business groups attempting to repeal a little-known but far-reaching tax law called Section 511. Passed last year, the provision requires federal, state, and some local governments to withhold 3 percent from virtually all government contracts to help cover the contractors’ federal taxes.
Included in the Tax Increase Prevention and Reconciliation Act of 2005, which aimed to cut taxes and boost federal revenue, Section 511 applies to contract payments beginning in 2011. Proponents say it will help the Internal Revenue Service collect taxes and help to recoup $7 billion in unpaid back taxes owed by roughly 60,000 federal government contractors.
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