The Washington Post reported on January 26th that the IRS will not be just bouncing back to normal now that the shutdown is over. The National Taxpayer Advocate has informed Congress that it could take as long as an entire year to return to normal operations - including providing tax support answers for your 1099/1042-S related information reporting questions. And that's an optimistic take on the mess.

According to the same National Taxpayer Advocate report the more likely scenario is that it will take as much as 18 months before normal operations resume - including providing tax support services. Part of the reason for the delay is the massive backlog of unanswered communications the information reporting community has sent to the IRS, and which will need to be addressed first.

Another reason for the delay in a return to relative normalcy is that the shutdown delayed training for IRS personnel still trying to get up to speed on the December 2017 Tax Cuts & Jobs Act (TC&JA). Remember, the TC&JA changed the 1099 backup withholding rate, changed 1099 reporting to payees from U.S. possessions, made changes to 1031/1035 exchanges, and radically reduced your organizations ability to deduct and provide W-2/1099 reportable fringe benefits and expense reimbursements - among a laundry list of other things impacting accounts payable departments around the country. Not least of which being that new regulations still have not been written to address such issues as the changes to W-2/1099 reportable qualified transportation fringe benefits (like parking which is largely now taxable and reportable) or business entertainment reimbursements. Nor are regulations being adequately crafted to explain to what extent meals in association with business entertainment are W-2 or 1099 reportable. Accounts payable departments, tax attorneys, and CPA's are still struggling to get somebody at the IRS to address these issues even though they have been on the books for over a year.

To put all of this in further perspective the IRS estimates it needs to train at least 2,000 employees before they can even start answering your accounts payable related questions - a process that can take months more. Moreover, none of these answers are being provided in writing. That means you cannot use those answers to show reasonable cause if your organization is assessed a 1099/1042-S related proposed penalty or come under audit.

That said, we can help! Our TIR Answer Center brings together veteran tax attorneys to answer all of your 1099/1042-S reportable information reporting and compliance questions in two business days or less. Plus, those answers are provided in writing so you can help establish reasonable cause for your reporting decisions. Feel feel to ask about the other benefits provided by a subscription to the TIR Answer Center.