Yesterday Bloomberg reported that between 2009 and 2012 JP Morgan Chase paid $8.5 billion in settlements with regulators over non-compliant behavior. Still think your organization can overlook all of its compliance requirements?

In an interview with Joshua Rosner, an analyst for Graham Fisher & Co, Bloomberg disclosed the stunning losses described by Rosner in a detailed and comprehensive report that, perhaps most shockingly considering the total losses involved, does not even include the immense $8.5 billion "London Whale" losses of last year due to inadequate internal controls; or the massive several billion dollar liability hanging over the bank for its role in mortgage abuses.

Rosner's report, highlighting the loss of 12% of JP Morgan's net income from 2009-2012, is attracting considerable attention given Bloomberg reports he "was one of the first analysts to highlight accounting and control problems about a decade ago at mortgage finance companies Fannie Mae and Freddie Mac before each was forced to restate earnings and oust management amid separate earnings scandals. He was also among early analysts to warn of an impending credit crisis in late 2006 in the residential mortgage-bond markets." Perhaps it is no surprise that based upon what he had uncovered in year's past that Rosner is now comparing JP Morgan Chase to Fannie Mae and Freddie Mac

What's more the documented fines and settlements are characterized by Rosner as being "light" (a byproduct of the bank using "campaign contributions and Washington influence to soften oversight") considering the sheer lack of internal controls and top level leadership causing the massive bank to careen from crisis to crisis.

Needless to say, even such light regulatory oversight would have destroyed a less well connected bank (and likely resulted in criminal penalties for top executives and employees given the vast scale of lawbreaking detailed in Rosner's report). So the question remains: you are not JP Morgan Chase (and thus likely not going to get the "kid gloves" treatment from an IRS examiner or be able to absorb "light" losses such as those paid by JP Morgan) so what is your organization doing to review and tighten its controls during this tax compliance season? Finally, with the attention being generated by reports such as Rosner's and increasingly stringent regulatory oversight, including by IRS examiners, how well positioned are you to handle a 1099 compliance audit?