Delay of Bad-News 3% Rule Provides Time to Kill It

The 3% rule, developed by the IRS, requires federal, state and local governments to withhold 3% of payments they make to contractors for taxes, much like employers withhold a percentage of employees’ income for tax purposes. Last week the IRS delayed the rule going into effect, which means there might be time to kill it. That is good news for both federal agencies and contractors alike. Why? Read on to find out about the challenges the 3% rule could pose.

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I missed this one – while idea may be good in concept, it may make it harder for smaller businesses to do work with government due to cash flow problems