Thursday, November 8, 2012

Head Up Concerning IRS Correspondence Audits, Compliance Issues and Worker Reclassification

IRS' Commissioner of Self Employed/Small Business Division gave AICPA National Tax conference attendees a heads up on the division's compliance priorities and potential changes.

Not surprisingly, he indicated they are shifting more resources to look at more flow-throughs. One issue that has come up in an ongoing study of employment tax returns (among several types of entities) between 2008 and 2010 is corporate use of personal vehicles.

The IRS has also heard from stakeholders about Voluntary Worker Classification - over the next few months, it will be looking at changes to the qualifications to allow more employers to be eligible. Not allowing those who are currently under audit has been one of the barriers to participation. To date, the IRS has received 719 applications for the program.

Fink also acknowledged frustrations with the correspondence exam program as a "hot button" issue and said the IRS will be doing "really deep dive" to see how it can be improved, including new rules or filters to better refine which cases they select and also will explore virtual service to provide direct interaction.

Have IRS Tax Problems?

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