On June 25th Accounting Today reported the IRS is aggressively seeking to expand it's tax enforcement and 1099 compliance capabilities via a new hiring push.

Note that the IRS is not looking to add staff to its tax support services. This discrepancy furthers a trend we have recently been following of substantial IRS cuts to tax support services coupled with increased resources going to 1099 enforcement and compliance. If you are in Accounts Payable or Tax it is important you understand this as all too often people have been focusing on the top line numbers regarding flat IRS budgets (meaning cuts after factoring in inflation) for a decade now.

That is all true, as is the fact that it is less likely that you as an individual will be audited today versus past years. However, the organization that you work for is another matter entirely. IRS data on last year's enforcement activities shows audits in relation to information reporting errors are rising at large and mid-sized organizations. Organizations with at least twenty million dollars in total assets were audited last year at an unprecedented 78% rate. Keep in mind this figure does not include B-notices or penalty notices assessed.

Furthermore, please be careful - penalty notice season is only weeks away. Remember, if your organization receives an IRS Form 972-CG it better be ready to respond - there is a 45 day deadline to request the penalty be waived. Helping organizations handle their penalty notice responses is one of our core functions. So, if that is something you need assistance with then please do not hesitate to ask.