Next GBG Educational Opportunity: November 12, 2009
Defense Acquisition University:
|DARC, or Defense Acquisition Regulatory Council, is responsible for issuing procurement regulations and is included in the FAR under section 1.201-1.|
Government Contractors Guide to Managing Federal Government Payments and Collections
Presenter: Bill Blumberg, principal, Federal Contract Solutions
Be sure to catch this GBG-sponsored teleconference presented by Bill Blumberg, who many may remember from his days at DFAS-Headquarters. While there, he was an active speaker for GBG and aided in the writing and understanding of the FAR.
Are you ready? In this slow economy, managing cash and liquidity are more important than ever. That same slow economy and the large Federal stimulus package are causing more companies to look at doing business with the federal government. However, doing business with and collecting from the federal government is far different than commercial business practice, with its own set of very detailed rules and procedures. Understanding those rules can improve cash flow. For any company with any federal contracts, this GBG teleconference will teach you what to do, how to do it and help you solve problems with the government at all levels.
|Date:||Thursday, November 12, 2009|
|Time:||3:00 – 4:00pm EST|
|Cost:||$39.95 for GBG members;|
|$49.95 for non-GBG members|
|*per phone line|
To register for the Government Contractors Guide to Managing Federal Government Payments &
Collections teleconference, click here.
3% Withholding Update
The IRS has published the interim rule needed to implement 3% withholding. The final rule will be published after evaluation of the more than 300 sets of public comments on the interim rule. Even the Treasury Department submitted comments to the IRS on withholding on purchase card transactions. Implementation has been delayed by one year and, remember, it applies to state and local governments as well as the federal government. Repeal efforts continue, but your help is needed. The interim rule’s key features are:
- It will apply to payments/actual disbursement of over $10,000 with the following:
- There is a $10,000 exemption threshold per payment
- Withholding is per payment, not per transaction, including payment/invoices combined or rolled up for the “convenience of the government”
- Depends on how accounting versus disbursing systems operate
- There should be no flow down to subcontractors. However, there is no enforcement vehicle to see that this does not happen
- Withholding must be taken at time of sales for purchase card payments, individual transactions under $10,000 are exempt
- Political subdivisions (state & governments): two fiscal years prior determines $100 million threshold
- Pass through entities: withholding taken unless 80%-owned by a government entity
- Impacts only new contracts or materially modified contracts
- Credit can only be taken against estimated income tax withholdings
- No credit against employment taxes (Medicare, Social Security)
- Government entities liable even if money is not withheld
- Does not apply to foreign vendors
- It is a significant rule because of its widespread impact
The comments are available online at www.regulation.gov, document number IRS-2008-0104-0167.
Many thanks to Bill Blumberg for contributing the teleconference and 3% withholding information! Bill has also agreed to answer a couple of the reader’s questions in the next couple of newsletters. If you have a government vendor question on which you’d like expert advice, please email Deb Carroll at email@example.com by September 15 or October 15 for inclusion in the October and November newsletters, respectively.