On May 10th The Treasury Inspector General for Tax Administration released its audit report on IRS compliance efforts. If you choose not to read the 35 page report then we won't blame you. But to summarize, if you are in Accounts Payable or Tax then you don't want to take your foot off the 1099 due diligence pedal.

The report focuses on Fiscal Year 2020 (the most recent year for which full data is available). And even then, prior to the IRS' hiring of thousands more personnel (see other recent blog entries for more on this), we can see that 1099 enforcement and staffing has been rising. By the end of 2020 the IRS' budget had climbed by $300 million, while it added 1,416 full-time employees in just that year.

More importantly, for the third straight year the IRS exceeded $50 billion in enforcement revenue ($51.1 billion in 2020). Moreover, the IRS conducted 509,917 audits and other such enforcement measures in 2020 - almost exclusively of medium to large sized filers like the organizations our dear readers in Accounts Payable and Tax work for.

What's more shocking about these numbers is that from April 1st to July 15, 2020 the IRS had actually suspended enforcement activities due to the Covid measures taken at the start of the pandemic. That means those half million plus audits stemmed from only a portion of the year. As such, you can be sure that these numbers shot up to greater heights in 2021.

Note that we stand ready to help. Our 1099 and 1042-S tax guides are great training tools that you can use to assist getting new team members up to speed on the latest IRS 1099 compliance requirements, refreshing existing personnel, or to revamp your policies and procedures this summer. Each month we also have a webinar on timely Accounts Payable and Tax Compliance related topics. In addition, there is our core question and answer service. You have a 1099/1042-S/State reporting or compliance question then we have the answer! Please take the time to learn more about our TIR Answer Center and don't be afraid to inquire about subscription benefits (offering up to five free webinars for premium subscribers)!