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The 1099/1042-S filing season continues and there will continue to be big changes in 2021 that Accounts Payable/Tax departments and CPA's will need to remain targeted upon in terms of performing their due diligence.

Last month the National Taxpayer Advocate issued its latest report. If you are in Accounts Payable, Tax, or are an independent CPA representing business clients then there were several important items revealed by the report. Perhaps the most important is that the IRS has essentially abdicated its responsibility to provide even a modicum of assistance to 1099 filers struggling to understand the blizzard of changes made in the law over the past few years.

Let's go to the report:

Following up on last year's record levels of enforcement collection the IRS is at it again. On January 5, 2021 the IRS announced (via IR-2021-03) that it had once again surpassed the $50 billion level in enforcement revenue collection. This time coming in at $51.1 billion in enforcement revenue collected during 2020.

A San Francisco Superior Court Judge has just ordered Uber and Lyft to stop classifying its drivers as 1099 independent contractors. This ruling further upholds California's sweeping Assembly Bill 5 employment classification set of rules signed into law by Governor Gavin Newsom in September 2019.

In March of 2020 the IRS announced that certain taxpayers generally have until July 15, 2020, to file and pay federal income taxes originally due on April 15. On, April 14, 2020 the IRS extended this relief to additional returns, tax payments and other actions. As a result, the extensions generally now apply to all taxpayers that have a filing or payment deadline falling on or after April 1, 2020, and before July 15, 2020. The extensions apply to many forms and tax payments made by tax-exempt organizations, including: 

Today, the IRS announced that in response to the COVID-19 virus, it will provide an extension of time for a Reporting Model 2 FFI (Foreign Financial Institution) or a Participating FFI to file the FATCA (Foreign Account Tax Compliance Act) Report (Form 8966) to the IRS. 

Last month the National Taxpayer Advocate issued its latest report. For those of you in Accounts Payable, Tax, or who are maybe an independent CPA representing business clients there were several important nuggets of information. The biggest takeaway is that, among other things, the IRS has essentially abdicated its responsibility to provide even a modicum of assistance to 1099 filers struggling to understand the blizzard of changes made in the law over the past few years.

Let's go to the report:

On January 6, 2020 the IRS released its annual report on the state of IRS operations and enforcement. If you are in Accounts Payable/Tax or maybe are a CPA then you definitely want to take note. 2020 is shaping up to be a much more difficult due diligence and filing year than even 2019.

As if record-high IRS enforcement revenue wasn't bad enough the Department of Labor (DOL) has been racking up record fine collections of its own. To wit, last year the DOL reported recovering a record high $304 million dollars redistributed from employers to workers because those employers are alleged to have misclassified those same workers as 1099 reportable independent contractors when the DOL found them to be W-2 reportable workers.

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.