Earlier this month the IRS announced a dubious record (at least for those of you in Accounts Payable & Tax). So far for TY2018 (meaning the filing your organizations and clients did earlier this year) the IRS reports that it collected an all-time record high amount of $59.4 Billion in enforcement revenue.

This is a stunning total. It means if you are in Accounts Payable or Tax at an organization of any size, that you must prepare carefully for this upcoming filing season. The IRS is collecting a massive chunk of this revenue by focusing heavily on the 1099 reporting that is being done (or not done) by those organizations you work for (either as an employee or perhaps as a third party accounting/CPA firm).

Worse yet, the IRS also reported that their auditors are becoming ever more adept at extracting large amounts of penalty revenue from organizations deemed to be under-reporters. To that end, the IRS has found that for TY2018 revenue officers within the Field Collection function collected, on average, over $2.6 million each.

What this is telling us is that the cost of having an audit opened looking into your organization's payment and reporting processes has never been greater. It is also telling us that, in conjunction with rising penalty rates, the total penalties levied and collected are also on the upswing. Speaking of rising penalty rates - please note that for TY2019, the penalty under both Section 6721 and 6722 is $270 per return (versus $260 per return the previous year), to a maximum limit of $3,339,000 per filer per year.

The final takeaway here is that though it is true that as an individual your chances of being audited are certainly lower than in past years - the same does not hold true for the organizations you represent or where you work. The IRS enforcement efforts are much more ruthlessly being targeted at organizations of all sizes but with a special emphasis on medium and large-sized organizations like maybe the company, hospital, university, college, insurance company, or bank where you work.