Testimony of Avonette Blanding, CPA — Senate Finance and Small Business Committees, June 7, 2023

Summary

Written testimony of Blanding, a CPA and small business owner, to the U.S. Senate Committee on Finance and the Senate Committee on Small Business and Entrepreneurship, dated June 7, 2023. Addressed to Chairman Cardin, Chairman Wyden, Ranking Member Crapo and Ranking Member Ernst, it discusses the tax literacy gap and how the IRS and SBA can better coordinate services. The testimony draws on work with Morgan State University's Baltimore Means Business entrepreneurship program and states that most questions from small business owners centered on taxes. It suggests that the SBA improve promotion of SBDC tax planning resources, that the IRS coordinate with MSIs and HBCUs on tax literacy workshops, and that the IRS reduce customer service wait times. It also relays suggestions from fellow CPAs for a small business hotline or chat option and industry-specific tax guidance.

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        Tes mony of Avone e Blanding, CPA, MBA and Owner of Blanding Financial Solu ons LLC
 U.S. Senate Commi ee on Finance and the Senate Commi ee on Small Business and Entrepreneurship
                                           June 7, 2023

Chairman Cardin, Chairman Wyden, Ranking Member Crapo, Ranking Member Ernst, and
members of the committees, I sincerely appreciate you inviting me to share my perspectives on
the tax literacy gap and how the IRS and SBA can better coordinate and improve services. Tax
literacy, competence or knowledge of the tax code and laws, is a challenge to many individuals
and small business owners. I developed my initial tax literacy while completing my
undergraduate degree in accounting and later demonstrated my competence when I earned my
Certified Public Accountant (CPA) license. When I meet people and share that I’m a CPA, there
inevitably is a reference to taxes, after which I laugh and then reveal that I haven’t been a
practicing tax accountant in decades but am fortunate to have many talented tax accountants in
my network. Like many other Americans, I have multiple roles, including that of small business
owner. I realize however that for many of my fellow small business owners, especially minority
owners, tax literacy is not their comfort zone nor greatest area of expertise.
For the past two and a half years, I’ve had the privilege of working as an accounting subject
matter expert and facilitator with Morgan State University’s Baltimore Means Business (BMB)
entrepreneurship growth program. In that role, I facilitate training and provide business advice
for aspiring and established minority small business owners. I introduce participants to topics
and practical information necessary for running the day-to-day operations of a growing
business. I secure subject matter experts to participate in a panel discussion of small business
accounting, tax, and technology issues. While supporting the BMB program, I’ve met with over
one hundred entrepreneurs and small business owners and during each panel discussion, most
of the questions centered around taxes. One of my guest panelists, Albert Hurston, CPA,
shared that “taxes are really complicated to a lot of small business owners because they know
that there are a lot of rules and regulations, but they don't understand which rules apply to
them.” In addition to not knowing which regulations apply to them, many minority business
owners are unaware of the tax incentives available to them. This lack of understanding and lack
of knowledge can have a significant and direct impact on the success and financial health of the
business. I suggest that the SBA improve advertising and promotion of the tax planning
resources provided by SBDCs.
Many minority serving institutions (MSIs) and historically black colleges and universities
(HBCUs) have entrepreneurship accelerator and business incubator programs. The IRS should
consider coordinating with those MSIs and HBCUs to provide resources to support tax literacy
workshops and seminars to the entrepreneurs and small businesses owners participating in the
programs.
Small business owners and tax practitioners who proactively call the IRS to seek assistance
often experience extremely long wait times. The IRS should continue to implement changes to
reduce the long wait time for IRS customer service calls. In preparation for the roundtable, I
contacted fellow CPAs for input. Samantha Bowling, CPA suggested that the IRS provide a
small business supported hotline or chat option on the IRS website. Mr. Hurston suggested that
the IRS provide more examples of "important taxes to understand for service providers" or
"important taxes to understand for restaurants" or similar types of information that could be
helpful for many small business owners.
        Tes mony of Avone e Blanding, CPA, MBA and Owner of Blanding Financial Solu ons LLC
 U.S. Senate Commi ee on Finance and the Senate Commi ee on Small Business and Entrepreneurship
                                           June 7, 2023

In summary, small business owners want to comply with the tax code and understand their tax
obligations but they also want to understand and take advantage of the tax incentives that are
available.

Thank you for your time and I look forward to your questions and answer s.


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