MARK R. WARNER comer ‘vn FINANCE BANKING, HOUSING, AND URBAN AFFAIRS Wnited States Senate suocer ULES AND ADMINISTRATION June 20, 2018 ‘The Honorable Gene L. Dodaro Comptroller General U.S. Government Accountability Office 441 G Street, NW Washington, DC 20548-0001 Dear Mr. Dodaro: As your office has noted in the past, Americans are increasingly engaged in contingent work ~ roughly a third participate in contingent work in some capacity, including those that supplement traditional W-2 employment, and many relied on contingent work as their primary source of income. Over the prior decade, contingent workers accounted for a significant share of net ‘employment growth in the U.S. economy. While the contingent workforce is having a profound effect on the U.S. economy, itis the part of the labor force we know some of the least about. In particular, we know very little about the “platform workforce” — the contingent workers that find short-term and gig-to-gig employment through online and mobile platforms. While still a modest part of the contingent workforce, the effect these new platforms are having on the economy ~ for example, in opportunities for ridesharing, grocery delivery, home repairs, goods selling, custom products, and other areas —is likely to become more significant over time. As these platform companies become a more enduring part of our economy, the way they interact with current U.S. tax policy merits further study. For example, how this segment of the labor force and these companies understand and engage with requirements under present tax law remains largely a mystery. Workers, in particular, may operate across numerous industries, vary significantly in how heavily they rely on individual platforms for income, and may or may not be distinguishable from non-platform workers on their taxes. Much of what we know is anecdotal, and data is limited. For many Americans earning income through these platforms, tax compliance, in particular, is a daunting new challenge. They may be treated as independent contractors for tax purposes for the first time in their professional lives. It may be difficult to manage the additional responsit such as quarterly tax payments, record keeping, inventory costs, and allowable deductions, among others, Information reporting rules vary, and each platform company provides different levels of tax information to the platform workers. To craft an optimal tax regime for these workers, Congress should know more. We need to understand how the tax code can help the platform workforce comply, get a better grasp of the tax challenges faced by these workers, and what needs to be done to ensure appropriate revenuecollection. To achieve this, as ranking member of the Senate Committee on Finance Subcommittee on Taxation and IRS Oversight, [ ask that the GAO perform a study addressing the following issues: 1. Analyze the available information on tax compliance of the platform workforce, to help understand the level of underreporting and over-reporting from workers earning income through the platforms. 2. Analyze the current tax withholding, reporting, and filing regimes to identify how they could be updated to reflect the growing size of the platform workforce, and additional challenges and costs faced by the platforms in complying with potential updates. 3. Identify the “best practices” among platform companies for helping the platform workers comply with their tax obligations, and what leads these companies to put in place these best practices. 4, Determine if there are ways to distinguish providers of goods, services, and accommodations, or distinguish platform workers based on their use of a platform, or through other tax attributes, and whether such distinctions call for distinct information reporting, withholding, or filing regimes. 5. Identify how different federal, state, and local agencies are measuring the size, scope, and growth trends of the platform workforce. Please use the findings of this study to recommend proposals related to these matters. If you have any questions and to discuss this research further, please contact Jonathan Goldman, senior tax counsel on my staff, at jonathan_gokiman@warer.senate.gov. Thank you for your time and attention, and I look forward to working with you on this effort. Sincerely, Mok KR Maney MARK R. WARNER United States Senator