New IRS audits: Is your firm a target?
January 28, 2010 by Jared BilskiPosted in: Government, IRS, In this week's e-newsletter, Latest news & views, Management issues, Tax compliance
Let your payroll folks know: The feds have put together another game of chance — with the grand-prize being an audit of your company’s tax returns.
This month, IRS says it’s finally launching its National Research Program (NRP) — three months after the original start date.
The NRP is an intense audit process — with IRS examiners going through tax returns line-by-line.
How does it affect your firm? The feds say that 2,000 employers will be selected at random for the audits — for each of the next three years. What’s more: There isn’t a thing firms can do to decrease their chances of being audited.
If the IRS does call your number, it’s best to be prepared. The feds will ask you to provide employment tax records, especially those related to:
- fringe benefits
- officers’ compensation
- expense reimbursement plans, and
- worker classification.
According to the IRS, they’re looking to gather info on the impact of employment tax noncompliance on the tax gap — to better understand its customer base.
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Tags: Employment tax noncompliance, Fringe benefits, IRS audits, Lottery, National Research Program, Payroll, Tax returns
January 29th, 2010 at 11:31 am
Here we go. The government has decided that businesses are the enemy and think that if they go after businesses it will help the country. This is FOOLISH thinking. We could improve this country and solve a host of problems by ending the massive burdens placed on businesses by the government. Sarbanes-Oxley for example has cost the average business $1,000,000 a year just to comply. In my job I spend 50% of the time complying with government requirements that accomplish nothing. I should spend that time creating jobs and a great work environment.
At what point will we admit our government is out of control?
February 1st, 2010 at 3:00 pm
I agree, I have been a Director Level Human Resource Executive for over 16 years and it’s amazing how much time I spend these days just dealing with compliance issues. With that and the fact that we’re a small employer in California………………”What’s next?”
February 5th, 2010 at 12:12 pm
Wow, we were part of a NRP audit for non-payroll issues — just S Corp and every line item on the income tax return. It lasted 16 months, and was grueling! Hope our number doesn’t come up again!
February 5th, 2010 at 12:13 pm
I’m a CPA Controller at a mid-size public company.
What’s next? Well after there are no employers left in the country, the liberals will pass a law saying if you have a certain level of assets that you must start a business or pay a fine that will be used to support the unemployed.
Then Congress will borrow more money, redistribute it to people who have none, in order to buy those peoples’ votes. In the meantime we will keep importing crap with borrowed federal dollars because we don’t have anyone making anything here. Then, last but not least, the federal government will either: a. monetize the national debt making the dollar into a hyperinflationary currency, or b. tell the Chinese and other countries that hold US treasuries that we aren’t paying them back. Either way, the party will be all over then.
We’ll have to either starve or fire up the military and just go take stuff the old-fashioned way. Pretty bleak isn’t it? Well unless we change the road we are on, this is the destination.
We need less government interference, more innovation, government spending restraint, the population to stop living on credit cards, and to pare back the intergenerational transfers that are going to wipe out our children and grandchildren. Good luck getting any of those to happen.
February 5th, 2010 at 1:27 pm
Sabanes-Oxley is a law named after the two gentlemen that produced the bill. This bill is supposed to help protect businesses as well as individuals because of Enron, Tyco International, Adelphia, Peregrine Systems and WorldCom.
I understand when the government gets involved with anything, it is not business as usual anymore. However, because of these huge companies that produced fake financial documents, what else is the government supposed to do. How else is the government supposed to make sure that big business doesn’t bring an economic collapse to the US. I also know we were at the brink this past year, because of Wall Street and whoever else everyone wants to blame.
It’s pretty bad when we have to spend 50% of the time doing nothing but trying to comply with regulations. But on the other side of that, how do we oversee what businesses do so that there is not another financial meltdown where people lose millions of their hard-earned money as well as jobs?