Well, small-business lender CIT's game of chicken with its lenders--in which it has been trying to coax more loans out of them by threatening a prepackaged bankruptcy filing--appears over, with a CIT victory, of sorts: the company filed one of the largest Chapter 11s in history, and expects to emerge from bankruptcy protection, this time in the ownership mainly of its current creditors, before the end of the year. (That $4.5 billion loan it secured last week remains operative. Indeed, the company also accepted a $1 billion loan from famed financier Carl Icahn over the weekend, which should serve to neutralize him as a threat to the company's plans.) The lender's creditors expressed support for the plan late last night.

The big losers in this are CIT's current stakeholders, which includes, well, you: the federal government invested $2.3 billion in the company as part of last fall's bailout; most if not all of that stake will be wiped out by the end of the Chapter 11 process.

But among the big winners might surprise you: none other than those small businesses that in the past looked to CIT as its lender. In the short run, while a few businesses that rely on CIT for factoring may find themselves in deep trouble, most will actually be saved by CIT's ability to continue to operate through its bankruptcy. And all of these companies, needless to say, are better off than if CIT faced outright insolvency, including a Chapter 7.

More importantly, in the long run, the New York Times hypothesizes, "It also means the end of CIT’s efforts to transcend its roots as a sleepy financier of retailers, restaurants and manufacturers." This is great! We never wanted CIT to transcend itself! We want it to be a "sleepy financier"! If the credit boom of this past decade found the banks--and, microcosmically, CIT--ignoring small business for the big ones, then perhaps the post-recession economy will witness a refocusing on those "sleepy" businesses and the relatively safe borrowing they do.

A lot of non-answer answers in the New York Times interview with Karen G. Mills, the head of the Small Business Administration. "But when the market collapsed, so did S.B.A. lending. Is there a better way to do it?" the Times asks, and while the real answer to that question would involve acknowledging that focusing on supplying credit when demand for credit was historically weak, Mills instead gives some boilerplate about the SBA working with banks. The Times questioner pressed on--generally, the paper did a bang-up job with this--and Mills changed the subject to the 23% federal-contract quota--which is important, but the fact is that the SBA as currently constituted (and, especially, as currently funded!) has really little power to do much to get each of the individual federal agencies to meet their procurement quotas.

In fact, much of the problem is with the way the SBA is established rather than its specific players. It is jerry-rigged to help banks lend to small businesses, and to help small businesses borrow from banks. That's a pretty narrow mandate, and it's one that happens not to be ideal to recessions. The one thing the SBA can that doesn't require too much extra funding or new legislation is to use its clout to advocate for federal policies in other areas that are likely to help small businesses. Mills does a great job with that here, advocating for the sort of insurance exchanges envisioned by the health-care reform bills. In that sense, then, the interview was a success.

It’s back! Actually, it never went away. It’s the issue of worker classification, or rather, misclassification. I’ve written about this matter before. (On employment-tax penalties, on independent contractors, and, again, on independent contractors. Hey, it's an important issue!) And now it’s a high priority item for the Internal Revenue Service, which just announced an audit initiative to study compliance with payroll taxes.

Why now? The IRS initiative comes on the heels of renewed Congressional interest in worker misclassification, and an August 2009 report issued by the Government Accountability Office.

The IRS is planning to use 200 to 300 of experienced and specially trained agents to conduct these audits of approximately 6,000 companies over the next three years. The companies selected at random will represent a broad cross-section of sizes and industries.

But this new IRS initiative is not just about worker classification. In addition, the IRS says, the audits will also focus on:

* Fringe Benefits: whether taxable benefits are misclassified as non-taxable, such as an employee using a company car to commute to and from work.

* Reimbursed Expenses: whether payments made by employers to reimburse employees for qualified business expenses made pursuant to an “accountable plan” that meets certain requirements, including proper accounting and reasonableness, are not actually taxable compensation.

* Officer Compensation: whether compensation paid to an owner/employee of an S corporation is “reasonable” and not improperly classified as a distribution of profits on which no payroll taxes are paid.

* Non-filers: Always!

Tax experts say that the focus of the initiative is to close the “tax gap," or the difference between taxes owed and taxes collected. Unemployment taxes are the second largest contributor to the tax gap, with underreporting of income by individuals being first.

If you’re at all concerned, maybe it’s time to conduct an internal compliance review and to talk to your tax advisor. There’s still time to prepare.

Jerry Kalish is founder and President of National Benefit Services, Inc., a Chicago-based employee benefit consulting and administrative firm that serves private-held companies, publicly traded companies, and public sector employers. He blogs at The Retirement Plan Blog and can be reached at jerry@nationalbenefit.com.

Two articles make it clear that--especially in the wake of President Obama's new small business lending plan, which involves them prominently--the community banks, those locally-focused institutions with under $1 billion in assets, are feeling newly empowered. The Washington Post reports that the community banks marshaled their numbers in order to influence the course of banking regulatory reform in their favor. And the New York Times reports that the banks have seen a marketing and advertising opening now that the big banks have discredited themselves in the public eye so. The real-life slogan "Real Texans Bank Locally" perhaps says it all.

It's worth noting that the community banks' fortunes tend to be closely tied to that of small businesses generally. For one thing, in many cases community banks are themselves small businesses. But more importantly, they are frequently more inclined to lend to small businesses, particularly smaller ones with objective numbers that may not indicate that they are fabulous loan opportunities. Small businesses should be pulling for the community banks. And it seems that, finally, they have something to celebrate.

The New York Times Op-Ed page lends its prominent space to an argument that broader policy should be geared toward enabling small businesses to start hiring again. The author, a Moody's economist, enters the small-business-jobs debate decidedly on the side of the notion that, in his words, "Small businesses are especially vital to job growth." He further argues that increased hiring will be the most efficient marker toward righting the economy as a whole (which makes sense, when you consider that the employed tend to be more apt to spend money than the un- or partially employed). So what does he favor to do this?

For one, he seems to agree with President Obama that the ceiling on Small Business Administration loans should be raised (he also advocates increasing the portion of these loans that the SBA guarantees to, in some cases, as high as 97.5%). He also wants the stimulus program's special carry back provision to be extended. We're glad these issues are now grabbing space in the Times. From its pages to legislators' eyes!

We have a prophet in our midst! Or perhaps a real mover and shaker. Yesterday, the New York Times's crack labor reporter, Steven Greenhouse, made the case for mandatory paid sick days based on the public-health risk presented by millions of workers coming into their offices on days when they should be at home, both nursing themselves back to health and, what's more, minimizing the chances that one of their co-workers catches what they have. Needless to say, the current H1N1 issue only amplifies the wisdom of this. Despite the fact that federal employees have paid sick leave, and that the Centers for Disease Control strongly advocate, roughly 40% of private-sector workers do not receive it. (In case you were wondering Wal-Mart contains a combination of paid sick leave and surprisingly punitive sticks for missing work.)

We don't know if Rep. George Miller (D-Ca.), the powerful chair of the House of Representatives Education and Labor Committee, read Greenhouse's article, but yesterday (as reported today by--who else?--Greenhouse), Miller introduced a bill that would guarantee five paid sick days in for workers who are sent home by their employees due to illness. The bill actually appears geared toward meeting the specific swine flu threat rather than the broader problem--it is called the Emergency Influenza Containment Act. It would also not required paid sick leave for employees who decide on their own that they are too ill to attend to work. Still, better than nothing?

A final note. The bill would also not apply to those businesses with under 15 employees--that is, the smallest of small businesses. We hope that most of those businesses, while appreciating the legislation's acknowledgement of their special circumstances, nonetheless makes the right move and, for the good of their employees, their businesses, and themselves, makes sure that workers who may have something to spread don't feel that they need to risk spreading it.

MSNBC runs a fantastic little story on the small businesses of Westwood, N.J. and how they have come to rely on the local, publicly owned community bank to get them through the months and years. (The community bank in question, it should be noted, was wise enough to stay away from the junk real estate loans that have helped cause the failure of 100 banks in 2009.) It's especially fascinating to hear all this stuff from the businesses' perspectives, straight from their owners' mouths. When times are tough, the consensus advice--and we ourselves have given it--is: first, slash payroll. But small business owners don't particularly want to lay anyone off, since their employees are, in the words of the restaurant owner interviewed, "family". Fortunately, it seems these owners' relationship to their employees is similar to the community banks' relationship to these businesses.

The New York Times confirms what we would already have suspected: over one quarter of all businesses are owned by women. Of course, the next step is apprising the powers that be, including the Small Business Administration (which is also run by a woman, Karen G. Mills), of this fact. Woman-owned businesses still do not receive their (meager) 5% quota of federal contracts; they are still disadvantaged by a biased health-care system; and meanwhile there numbers are, if anything, only growing. It's time everyone took a bit more notice.

How have we never come across this word before? It turns out that "homepreneurs"--those who run their own home-office businesses--account for 13 million jobs. Over one-third of such businesses generate over $125,000 in annual revenue; 8% generate over $500,000. They may not be the mom-and-pop hardware store on Main Street, but these are small businesses, too, and as such, we would hope that federal policy is geared toward helping them thrive. One good first step would be to simplify the home-office deduction; another would be to make the self-employment tax fair. Any other ideas from our homepreneur readers?

OPEN Forum (published by our sponsor, American Express OPEN) runs a good primer on credit unions, and why they are probably a very good borrowing option for you if you are a small business. (The post does note the prime downside to credit unions: in order to borrow from one, you generally first need to be a member.)

The post got us thinking about whatever happened to that credit union bill? The one that would allow them to devote a far greater portion of their resources to small-business lending? If policymakers wish to signal that they truly do care about small businesses' credit situation, and that they are capable of thinking somewhat creatively, they could do worse than to make that bill law.

Well, we were skeptical of America's Recovery Capital from the beginning. The program has the Small Business Administration guaranteeing 100% of small loans (capped at $35,000) made to "viable" small businesses that are trying to pay off pre-existing debt. We wondered how useful the program was; we wondered whether it was really trying to help small businesses or banks; and we wondered whether banks would participate without much incentive to do so. Now, today, the Washington Post reports that 60% (!) of all ARC loans are expected to default.

Turns out the program's genesis was as a way to help the noble lobstermen of Maine--which is to say, to garner the crucial vote of Sen. Olympia Snowe (R-Me.) back when the stimulus act, which estabished ARC, was being debated last winter. But now, it's a shambles. The good news is that only a quarter-billion was devoted to the program (which, in federal-outlay terms, isn't all that much). The bad news is that it's going to be very difficult to halt it prematurely. The only use ARC can have is as a warning to discourage similar, future programs. So don't forget the foul acronym!

The NFL season continues apace, and with it, the Redskins' utter ineptitude.

Money for your clean-tech business. How to land some of those federal stimulus dollars. [OPEN Forum]

Get to know the 8(a). Rieva Lesonsky educates you about the lesser-known Small Business Administration lending program. [AllBusiness]

Getting your wings. How to navigate angel investors. [NYT]

The small business bailout. Journalist Jon Cook considers President Obama's lending plan. [Entrepreneurial]

Another day, another set of bad numbers for the nation's small businesses. In the past fiscal year (October to October), sales at small businesses--defined, fairly reasonably, as private companies with annual revenues of under $10 million--saw sales drop almost 4%. And yet, as also seems to be the case, another day, another silver lining: profits at these same businesses over the same timeframe rose 6.5%. Looks like entrepreneurs have remembered that a dollar saved is a dollar earned.

It's notable that profit margin also rose during this time--it sort would have to, of course, given that profits rose on less revenue. And where did the cuts come from? Well, overhead was down a bit. But down far more was, yes, payroll expenses. That fact might help to explain the dispiriting 10.2% unemployment figure. But it also helps to explain small businesses' continued solvency, despite all the challenges they've faced over the past year.

Columnist Rieva Lesonsky is always worth a read, and her column last week on gift cards is no exception to that rule. But her piece--which argues that gift cards are a must for retailers, even (maybe especially) small retailers--reminded us of something. And that is that: Black Friday and the holiday season approach! It is (almost) that most wonderful time of the year! It is almost that time when you can (almost) make up for these lousy past months.

Now is the time to pull out all the stops, deploy all the gimmicks, offer all the coupons (and gift cards), and, most of all, discount discount discount. Plus, pray. Some people certainly seem to think that works, anyway.

Bankruptcies, foreclosures, and creditors writing off debts: these consequences of the recession are well-known. The potential year-end tax hit, however, may come as a surprise. But the fact is that if you’ve had a creditor write off a car loan, credit card debt, medical bills, or another sort of personal loan, there is a good chance that the Internal Revenue Code may require you to treat the amount forgiven as income.

Amount of Debt Forgiven is Taxable, With Exceptions

The general rule is that when a creditor writes off a debt, the amount of the cancelled debt is treated as taxable income to the debtor. Procedurally, the creditor issues a Form 1099-C, Cancellation of Debt, to the debtor. There are exceptions: prominently, homeowners who have had their mortgage debts cancelled when their homes were foreclosed upon and sold do not have the forgiven debt counted as income. However, many are unaware that such homeowners, along with others who may qualify for an exception, still must make a filing--a Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment)--to take advantage of the exception.

Overall, according to IRS data, it is likely that an estimated two million taxpayers will receive a Form 1099-C. Unfortunately, the IRS estimates that hundreds of thousands of these taxpayers who would otherwise qualify to claim an exception and exclude the cancelled debt(s) from gross income will fail to file the Form 982--paying more tax than required by law because they unnecessarily will include the amount of the cancelled debt in their gross income. On top of that, they risk prompting an audit.

Tips for Preparing and Filing the Form 982

The amount reported by the creditor to the IRS as being cancelled will be listed in box 2 of the Form 1099-C, Cancellation of Debt. (You should receive this Form 1099-C from your creditor by mid-February 2010.) To determine the amount of the cancelled debt that must be included or excluded from your income, consult Publication 4681, which details the instances when cancelled debt can be excluded from income. Calculating the amount that qualifies for exclusion may be as simple as recording box 2 of the Form 1099-C, for lines 1e, 2 (and possibly 10b) of the Form 982. Then, attach the Form 982 to the completed Form 1040. Most business taxpayers, however, should be prepared for the form to take several hours to complete because of the complex nature attributable loss and/or basis calculations.

Susan Berson, a partner at the Banking & Tax Law Group LLP, is the author of The Modern Rules of Personal Finance for Professionals, and other books.

Those who know us know that we ... love ... Detroit. Where others see a postapocalyptic landscape done in by the auto industry Armageddon, we see cheap start-up costs and a town already filling and soon to be filled with smart and savvy entrepreneurs starting new companies based on innovative ideas. CNNMoney must have seen the same thing, cause they have a new feature on various up-and-coming entrepreneurs who have decided to call Detroit home.

Unsurprisingly, the list is dominated by the life-sciences, tech, and green industries--it probably would be just about anywhere. Still, there's something very poignant about, say, Ann Arbor-based Sakti3, which plans some day to market a battery that would allow cars to get 100 miles per gallon of gasoline. One more auto innovation from the Motor City.

MSNBC gets two folks together to discuss the newly proposed federal bill, which we covered last week, that would mandate paid sick days in response to the H1N1 epidemic. The MSNBC got two people to debate it: one, from the American Public Health Association, is in favor; the other, from prominent (and conservative) small-business lobby the National Federation of Independent Business, is opposed. You can watch it below.

What is striking is what the two sides agree on. Both agree that all businesses ought to have mechanisms in place, whether it's paid sick leave or easy telecommuting, that encourage employees who feel ill not to come to the office and therefore risk contaminating their co-workers. And both agree that, in a perfect world, all businesses would voluntarily adopt such mechanisms, and there would therefore be no need for a legal mandate. It's just that the doctor places greater emphasis on the public-health angle (while noting that it's also in businesses' interests), and the NFIB spokesperson puts greater emphasis on businesses' independence (while noting that most of them do this anyway. For our part, we'd only note that the bill, as currently conceived, exempts businesses with under 15 employees. So maybe it itself is more of a compromise than people realize?

OPEN Forum (which is published by our sponsor, American Express OPEN) does a good job explaining what those bustling Millennials--typically defined as those born after 1982 or thereabouts--have to teach older folks about business.

The common theme, and it is partly derived simply from the fact that Millennials are currently, by definition, the young people, but which also corresponds to a more particular generational trait--is that Millennials emphasize what works best over various other externalities, including what has worked in the past. They are overwhelmingly meritocratic; they are quick to adapt to new technologies when those technologies can make things operate more efficiently; they think morale is very, very important. In addition to all that, they are, naturally, extremely socially conscious. This, of course, goes not just for Millennial entrepreneurs but for Millennial consumers as well. Which makes it all the more imperative for the non-Millennials to catch on.

Drudge Siren, Drudge Siren! Looks like President Barack Obama is getting behind a federal bill that, in reaction to the H1N1 epidemic, would mandate paid sick leave at all businesses with 15 or more employees. The Deputy Secretary of Labor testified Tuesday that the administration supports the bill's passage. "The Healthy Families Act offers an important opportunity to provide workers with economic security by assuring that they have the ability to stay home if they are sick without fear of losing their jobs or being forced to go to work sick because they cannot afford to stay home," he said.

... Notice something? Providing workers with economic security? The Deputy Secretary of Labor? In lending its considerable weight to the bill, the Obama administration is advertising its benefits for the American worker. That is certainly not an incorrect position. But meanwhile, there is legitimate debate among business owners--particularly small business owners--as to whether the bill is a net plus or a net minus for them. It would be nice to know where the administration lies when it comes to that argument. Does it support the Healthy Families Act in spite of or, at least in part, because of its effects of small business owners? We'd like to see some testimony as to that as well.

Remember how the credit card bill of rights passed several months ago did not protect small-business cards? Well, after a new effort to rectify that, it still won't. And it's all thanks to ... Rep. Nydia Velazquez (D-N.Y.), the chair of the House Entrepreneurship Committee? (By the way, we are sponsored by American Express OPEN.)

So reports Robb Mandelbaum over at You're The Boss. It seems Velazquez shared the fears of the extension's Republican opponents: that the measure, by treating consumer and business debt similarly, would make it more difficult for businesses to obtain credit. We're not sure the evidence supports that. And we're quite sure that common sense suggests that small business owners deserve the same protections that consumers do.

We reported on this before, and now new information is making it ever more clear: President Barack Obama can encourage increased community bank lending to small businesses all he wants, and it's still going to be an uphill battle to get them actually to take the cheaper government money.

The problem is that because the extra money is coming from the TARP fund, it comes with all the TARP strings attached: extra oversight, extra regulation, and the chance that, without a moment's notice, the rules could be changed on the banks. Can you blame them? In addition, there is also the Mark of TARP: it is simply bad PR to be a bank that takes the bailout dough, even if, in this case, it's the small businesses who would be bailed out. Back to the drawing board, guys?

We're a couple days late, but a hearty thank-you to the veterans of the U.S. armed forces.

From war to entrepreneur. Veterans start their own businesses. [Entrepreneurial]

From student to entrepreneur. Ditto college kids. [OPEN Forum]

Making payables pay. Ways to increase your business's cash flow and solvency without actually changing your business. [Entrepreneur]

Help the IRS help you. No, really--check out this nifty retirement-planning tool. [AllBusiness]

'Friending' Facebook. The social-networking site can be an invaluable marketing tool for small businesses. [NYT]

It's that time of the year again: the 401(k) safe harbor notice requirement of December 1 is fast approaching.

If you’re not aware of the 401(k) safe harbor, it’s a provision in the retirement plan law that allows you as an owner to automatically meet the 401(k) discrimination test--and thus, avoid returning any 401(k) contribution. The dollars can be significant: 401(k) limits for 2010 will be $16,5000 plus $5,500 catch-up if you are age 50 or older. So what's December 1? It is the deadline for you to provide the required safe harbor notice to your employees for 2010.

You yourself can satisfy the safe harbor requirements for next year (after giving timely notice to your employees) by making one of two types of contributions:

* At least 3% or more of compensation to all eligible employees. Generally, the 3% contribution must be provided to all employees eligible to make elective deferrals to the plan even if they choose to make no contributions themselves.

* A matching contribution equal to 100% of the first 3% of employee contributions 50% of the next 2%. That is, if every employee contributes at least 5% of their compensation, the maximum employer match is 4% of total compensation.

But if economic uncertainties leave you undecided about whether you want to have a safe harbor 401(k) plan for 2010, then you can take advantage of certain safety valves that IRS regulations have made available.

On May 18, 2009, at the height of the economic meltdown, the IRS issued proposed regulations that allow distressed employers (those who have incurred a “substantial business hardship”) to reduce or suspend their safe harbor contributions to their 401(k) retirement plans mid-year. Although only proposed, the new rules can be relied upon immediately for plan amendments adopted after May 18, 2009.

But here’s another safety valve that may provide you even more flexibility, even if you haven’t sustained “substantial business hardship”: instead of distributing a safe harbor notice that guarantees the 3% contribution regardless of its subsequent financial condition, an employer can provide a “conditional notice” at least 30 days before the start of the plan year.

The notice would state that the employer may give a safe harbor contribution for the following year. And then, no later than 11 months later, the employer must provide another notice indicating that the safe harbor has been elected and the 3% contribution will be made for that year.

The above applies to the 3% safe harbor contribution across the board. But what about the safe harbor match: can it be stopped during the plan year? The answer is yes, by providing a notice to employees at least 30 days before the contributions are to be stopped.

1. There must be the proper plan documentation.

2. The 401(k) discrimination tests must be provided for the entire plan year.

Actually, there’s one more important consideration: your employee's expectations. You should try to go beyond the formal notice requirements when communicating with your employees.

There’s some fine print to consider, of course, and safe harbor plans are not for every business owner. The decision to use the safe harbor method to maximize your 401(k) contributions should be based on your objectives and your plan’s demographics. And that allows me to segue into my usual caveat: this column is for informational purposes only, and should not be considered tax or legal advice. You should discuss this matter with your own tax advisor.

Jerry Kalish is founder and President of National Benefit Services, Inc., a Chicago-based employee benefit consulting and administrative firm that serves private-held companies, publicly traded companies, and public sector employers. He blogs at The Retirement Plan Blog and can be reached at jerry@nationalbenefit.com.

This thing reminded us of this thing. Sometimes, it pays to be small. And maybe never more than right now.

While much of the small-business credit drop of the past year can be, er, credited to falling demand for credit (this economy, after all, is not a splendid time to go into debt if you can avoid it), we have also pointed the blame in part at some of the country's biggest banks (and biggest recipients of federal bailout money), who have permitted less-than-encouraging raw numbers and, even more, a dispirited psychology to coax them against lending very much at all to the nation's small businesses.

And new numbers reveal much the same. If you take the small-business loan balances of the 22 banks that received the most federal bailout money over the past half-year, you can watch a $10.5 billion decline. You can also witness three of those banks make no small-business loans at all. So much for gratitude?

So uber-investment bank Goldman Sachs is teaming up with Warren Buffett to put together a $500 million program for training, mentoring, and, yes, providing credit to up to 10,000 small businesses. We wish we could say that they are doing this because it makes good business sense (as Goldman's press release seems to argue), but frankly, if that were the reason, they would probably commit a lot more than half-a-billion to it. Rather, according to the New York Times, this is all about alleviating a bunch of bad publicity. Much of that bad publicity derives from Goldman's outstanding success this year, and the $17 billion it has already set aside for employee compensation. And it also comes from reports that it (and the other big recipients of federal bailout money) have actually cut back on lending to small businesses, and from its being chastised by those with small business on their minds. So, you know, you can thank us in part. You're welcome.

Even as we speak (or type), various prominent officials in the Obama administration are meeting with various prominent folk in the small business and banking communities. Treasury Secretary Tim Geithner,Small Business Administration head Karen G. Mills, and Small Business & Entrepreneurship Commitee Chair Sen. Mary Landrieu (D-La.) are among those who will pick each other's brains today, along with the brains of several invited small business owners.

The New York Times's Robb Mandelbaum has the essential take (as he usually does). "Banks still seem wary of taking bailout money, and the Democrats who run the House Small Business Committee are uninterested in increasing SBA loan sizes to the levels the Obama administration proposed," he notes. "But a conference--that’s something that can be accomplished quickly." He'll be reporting on the gathering tomorrow. Should make for some further good reading.

Even as we speak (or type), various prominent officials in the Obama administration are meeting with various prominent folk in the small business and banking communities. Treasury Secretary Tim Geithner,Small Business Administration head Karen G. Mills, and Small Business & Entrepreneurship Commitee Chair Sen. Mary Landrieu (D-La.) are among those who will pick each other's brains today, along with the brains of several invited small business owners.

The New York Times's Robb Mandelbaum has the essential take (as he usually does). "Banks still seem wary of taking bailout money, and the Democrats who run the House Small Business Committee are uninterested in increasing SBA loan sizes to the levels the Obama administration proposed," he notes. "But a conference--that’s something that can be accomplished quickly." He'll be reporting on the gathering tomorrow. Should make for some further good reading.

At least as far as Department of Defense spending goes, small businesses may not have to worry that they are being denied their rightful 23% of all federal contracts much longer. That's because, according to the New York Times, current trends in Pentagon spending will expand the opportunities for small contractors. Specifically, the Pentagon will likely be in the market less for complex and gargantuan weapons systems, which only two or three (gigantic) companies are even remotely capable of producing anyway, and more for small, individually tailored jobs and devices in the information-systems industry. "Second-tier defense contractors focused in information technology and intelligence applications will probably do well in the emerging military market," one analyst predicts.

The best advice we've read for small companies looking to get in on those billions in federal contract dollars is to seek to become a subcontractor, at least at the outset. That is, try to do business not with the government itself, but with the business that directly won the government contract. That way, you still get the benefit of all those extra billions the feds are handing out, but without all the hassle involved in actually bidding on and winning a contract.

So what was discussed at that meeting yesterday among administration officials, lawmakers, and small business owners?

The good: Treasury Secretary Tim Geithner admitted that the small-business credit crunch lingers. Acknowledgement is the first step toward fixing. He even went a step farther, joining our very own Anonymous Banker in laying some of the blame for the status quo at the feet of the banks: "Banks bear some responsibility for the extent of the damage caused by the crisis. And they carry a substantial obligation to help our communities get back on their feet." It's also very much worth noting, as Robb Mandelbaum does, that Geithner actually stayed throughout the day. We know this stuff is important; it's good that he does, too.

The bad: as Daily Dose notes, Geithner's admonishment that the banks have got to lend to small businesses more amounted to little more than a "pep talk." Maybe if some of the lawmakers present--in addition to Geithner and Small Business Administration head Karen G. Mills, Sens. Mary Landrieu (D-La.) and Mark Warner (D-Va.), the former the chair of the Small Business & Entrepreneurship Committee, were there--decided that the banks are not going to listen to mere pep talks and might require some greater inducement, then the credit would truly once again flow.

Via You're The Boss, we see that Sen. Olympia Snowe (R-Me.), the ranking member of the Small Business & Entrepreneurship Committee and our favorite senator, is actually seeking to end the America's Recovery Capital lending program before it wastes $120 million more of taxpayer money. A 60% default rate will make you think that way, we suppose.

Snowe's bill really is a stop-him-before-he-kills-again measugre. Over $130 million has alrady been lent out in 100%-backed microloans to struggling but "viable" small businesses trying to pay back pre-existing debt. The bill is about saving what remains of the $255 million originally allocated to the program (back in last February's stimulus act) and, presumably, putting it to more productive use. If legislators need any further convincing that Snowe's bill is probably a good idea, they should read what our Anonymous Banker had to say about the ARC program. This was bad from the start. Let's limit the damage.

Here's a tip: do what Thanksgiving cooking you can before Thanksgiving. That way, you can spend less time day-of cooking, and more time drinking and watching football.

What else to talk about when you talk about lending. Alternatives to bank debt. [OPEN Forum--from our sponsor, American Express OPEN]

Starting a small business in New York City. Of course, there's some good stuff in here even if you're starting one elsewhere. [NYT]

Entrepreneurs against health-care reform? Not generally, of course. But there's an interesting trend among actual federal legislators. [You're The Boss]

Authenticity's the rage. And it makes great marketing! [The New Entrepreneur]

The women. Some folks with two X chromosomes who are practicing fantastic entrepreneurship. [AllBusiness]

A new tax provision allowing taxpayers to carry back their net operating losses (NOLs) farther may create the prospect of refund opportunities for those whose businesses financially suffered through 2008 and 2009.

NOL Carry Back Extension
The Worker, Homeownership, and Business Assistance Act of 2009 provides options for taxpayers who suffered losses in 2008 or 2009 to recoup. The new law allows taxpayers to carry back NOLs from any one year beginning or ending in 2008 or 2009 for three, four, or five years, and it suspends the 90% alternative minimum tax limitation for the carried back NOL. There are restrictions. For example, a NOL carryback can offset only 50 percent of the income from the fifth year. Also, unfortunately, if you received assistance under the Emergency Economic Stabilization Act of 2008, you are not eligible to participate.

Important Considerations for Selecting the Best Year
Calendar year taxpayers may choose between 2008 and 2009. Non-calendar year taxpayers may choose from 2007, 2008, and 2009. Obviously, you want to choose the year, referred to as an “election," that maximizes your tax benefits. Important considerations in making this election include: (i) Net effect of the extended carry-back year plus the standard carry-back still available for other tax years not chosen; (ii) Amount of loss in 2008 versus 2009; (iii) Amount of income in prior years; (iv) Tax rate paid in previous income years; and, (v) Opportunity to accelerate deductions in a current loss year.

Depending on how the mix of these factors plays out, a taxpayer may have the opportunity to increase the carryback benefits through accounting method changes that accelerate deductions or defer income. Because an election is irrevocable, it may be worth it to invest in a visit with a competent tax professional who can analyze all the scenarios for the tax years that are applicable to you before making an election.

Deadline for Increasing The Carry Back Benefit

Determining which election offers the best benefits should be done sooner rather than later. December 31, 2009, for calendar year taxpayers, is the most pressing deadline. Various method change opportunities that may be filed with a timely return also exist relating to: (i) repairs and maintenance costs; (ii) incurred-but-not-reported claims (for all self-insured medical expenses, including medical portion of worker's compensation); (iii) deferral of advance payments; (iv) deduction of prepaid insurance and certain other prepaid expenses that do not create a benefit extending beyond one year; (v) acceleration of payroll taxes related to bonus payments; and, (v) reasonable computer software expenses.

Filing for quicker refunds

Generally, a tentative refund claim via Form 1139 (or Form 1045) is quickest since the IRS pays within 45 days to avoid paying interest. If your expected refund is greater than $1 million, don’t skimp on the processing: overnight mail the form to the IRS, and add Form 8302 for direct deposit.

Susan Berson, a partner at the Banking & Tax Law Group LLP, is the author of The Modern Rules of Personal Finance for Professionals, and other books.

MSNBC speaks with a Connecticut small business owner who was present at last week's day-long Treasury Department meeting over small-business credit. You can watch below. We like his belief that what is necessary is less a series of specific, discrete initiatives and more a "culture change" that would redefine what it means to be creditworthy when you are a small business in a recession, whose raw statistics are necessarily a little less impressive. On the other hand, he seems a little star-struck, and could not articulate any concrete changes that directly resulted from the meeting. And make no mistake: as great as it is to have Treasury Secretary Tim Geithner and Small Business Administration head Karen G. Mills sitting in an all-day session in Washington, D.C. with real small business owners, this meeting will be judged on its results.

With "homepreneurship" on the rise, Entrepreneur delivers with a to-do list for anyone looking to start their own business out of their homes.

The general thinking seems to be that you should do what you can by yourself but at the same time be unafraid to outsource: though its obviously more expensive initially, it usually pays dividends in saved time and even in punitive costs down the road. So consider using a CPA for your bookkeeping; a merchant services provider can arrange it so that you can accept credit card payments; a web designer can help you establish your Internet presence. Feel free to splurge a little. After all, with your mere choice of office location you are already saving a good deal of dough.