We just spent the past two months reminding our readers, listeners, and subscribers of the dangerous liabilities that can arise from negative interactions with the IRS. These include things like CP2100 "B" Notices, IRS Form 972-CG Proposed Penalty Notices, and dealing with audits.

Along comes Microsoft, who has been subject to the largest audit in IRS history. This audit explored the tax impact of Microsoft's decision to channel profits to a small factory in Puerto Rico that burned Windows software onto CDs as a form of a tax dodge. Meaning that Microsoft engaged in a pure tax avoidance scheme designed to shift its profits abroad in an effort to avoid paying U.S. business taxes.

After over a decade, and in a decision only covering Tax Years 2004 to 2013 those auditors found Microsoft owes the IRS $28.9 billion in back taxes, plus penalties and interest. Folks, this should be a wake-up call to every Accounts Payable or tax professional. The IRS is taking enforcement very seriously, and in a way it hasn't in a very long-time. It's our belief that this is only the tip of the proverbial iceberg.

We can't say this enough, but the upcoming 1099 filing season is going to be crucial for your organization in terms of getting it right. That's because 1099 reporting is one of the IRS' highest priorities in terms of collecting monies otherwise owed but not being remitted; thus contributing a substantial portion of the ongoing "tax gap" between what the federal government should be taking in and what it actually receives from organizations like yours and the thousands of vendors for whom you must 1099 report payments made in the ordinary course of your trade or business.