Act Now to Prepare for IRS Employment Tax Audit Initiative
The article discusses a new employment tax audit initiative being undertaken by the Internal Revenue Service (IRS) and recommends the measures employers should take to prepare. The Employment Tax Audit Initiative is designed to reduce the difference between the amount of taxes the IRS estimates is due and the amount actually paid by taxpayers. In an effort to close this gap, the IRS will randomly select 2,000 companies to audit each year, focusing on five central issues: worker classification, fringe benefits, officers' compensation, reimbursed expenses and non-filers.
In order to prepare for this initiative, Mr. Packman and Mr. Rivero suggest that employers review their practices for classifying workers and structuring compensation, benefits, and reimbursement plans. The authors also give a point by point examination of the five issues that the IRS will address and the questions it will attempt to answer during its audit initiative.
Mr. Packman and Mr. Rivero provide strategies for companies to ensure they are in compliance with IRS regulations. They conclude by stressing that the audit is the beginning of a long-term emphasis by the IRS on employment tax and that whether or not a company is audited, it is in each organization's best interest to implement strategies to identify and address any compliance issues. To read the full article, please visit the link below.