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How to obtain penalty relief for clients affected by delayed IRS forms
By Jim Buttonow, CPA; CoFounder and VP New River Innovation - Thursday March 28, 2013From the IRS Inside blog. Because of last-minute tax changes this year, 31 IRS forms needed for filing were delayed. Some taxpayers who had to wait for these delayed forms may file an extension. When filing extensions, taxpayers are required to estimate and pay 90% of their tax liability (Treas. Reg. 301.6651-1(c)(3) and (4)). However, some taxpayers may not have had the benefit of the forms, including computations, to help them properly estimate their liabilities. When taxpayers incorrectly estimate and inadvertently underpay their tax liabilities with a filed extension, the IRS automatically imposes a failure to pay penalty. On March 20, the IRS announced that it will waive failure to pay penalties for taxpayers filing extensions... -
IRS expands eligibility for worker reclassification program
By Jim Buttonow, CPA; CoFounder and VP New River Innovation - Friday January 4, 2013
From Jim Buttonow's "IRS Inside" blog . On Dec. 18, the IRS announced a revision to its voluntary classification settlement program (VCSP) that provides partial relief from federal employment taxes for eligible taxpayers who agree to prospectively treat workers as employees. The original program, established in 2011, requires strict Form 1099 compliance, specific audit provisions, and assessment statute extensions, among other criteria. Recently announced changes to the original VCSP include the following temporary eligibility expansions: Taxpayers who are otherwise eligible for the original VCSP, but have not filed all required Forms 1099 for misclassified workers for the previous three years, are eligible for the expanded... -
It's here: Form 1099-K business income matching
By Jim Buttonow, CPA; CoFounder and VP New River Innovation - Monday November 26, 2012The IRS has always been able to match individual tax returns against information statements and propose underreporter adjustments that come in the form of CP2000 notices. ??But things are changing, and a new era at the IRS is upon us. ??Now, the IRS is using information statements to find underreporting on business returns. For practitioners across the country, this will add to the already increasing level of post-filing compliance activity they are seeing. ? More Interest in Business Income ?? In September, the IRS started its first information return-matching program for business return Forms 1120, 1120S and 1065. This program matched business return incomes to the total amounts reported on all information returns. ?? This year... -
Eight Small Business IRS Audit Areas to Watch Through 2013
By Jim Buttonow, CPA; CoFounder and VP New River Innovation - Monday September 10, 2012
The IRS continually analyzes compliance levels for entities, issues and industries by conducting hundreds of compliance projects and initiatives each year. Leading up to the start of the government’s fiscal year on Oct. 1, the IRS has announced emerging or significant areas that it will prioritize for the coming year. When it comes to compliance, the IRS has increasingly focused on small business underreporting, which is responsible for 84% of the $450 billion tax gap. At national and regional tax forums held this summer, the IRS projected small business areas where it will focus through 2013. Here are the highlights: Fringe benefits, especially personal use of company cars. The IRS is completing its third and final year of a... -
From Reactive to Proactive: Stay Ahead of IRS Compliance Initiatives
By Jim Buttonow, CPA; CoFounder and VP New River Innovation - Thursday September 6, 2012
Filing efficiency comes naturally to most CPA firms. With the current technology available and well-established industry best practices, it’s an obvious priority. But when it comes to post-filing work – issues, notices and other compliance activities that arise after tax filing – many CPAs face a manual process: Sift through files for documents from a previous IRS interaction, research the new issue, call the IRS, call the client, and repurpose the old documents to create a new response. Now more than ever, CPA firms need to be just as efficient in their post-filing work as they are in filing taxes for their clients. A recent study showed that the average firm spends 66 days a year addressing client IRS issues. Even for the simplest...
