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A special heads-up to our readers. Please note that our friends over at Accounts Payable Now & Tomorrow have expanded their much anticipated annual AP appreciation week. Though we here at TIR Consulting focus on 1099/1042-S reporting, we also recognize there is much more to an AP professional's job than dealing with (the admittedly) onerous federal and state level due diligence/filing obligations.

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.

Earlier today National TaxPayer Advocate Nina Olson released her latest report to Congress regarding the state of IRS services - and it's not pretty.

In short, if your organization has 1099 related filing and due diligence questions then don't expect answers from the IRS. According to Olson's new report; " IRS telephone assistors during the recent filing season answered just 25 percent of taxpayer calls enterprise-wide."

Yesterday, Marketwatch reported that KPMG has been cheating way more than understood. Moreover, they have been doing so in terms of, among other things, the training their employees need to complete to be considered competent dispensing 1099 related compliance and filing guidance to their clients.

Here's the sordid details (as reported by Marketwatch):

Subscriber Question #1:

We received a W-9 from a vendor. In box 3 they checked "Limited Liability Company and entered their tax classification as a "C-Corp". Is there anything we need to do to verify if they are a corporation before we decide not to 1099 report them?

TIR Answer Center Response:

On February 12th the National Taxpayer Advocate issued a report with enormous implications for accounts payable professionals seeking help with their 1099/1042-S filing/compliance related questions.

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.

The shutdown has crippled IRS support services. If you have 1099/1042-S filing questions you need to figure out the answers on your own, or find a trusted advisor. The latest news reports are showing that IRS employees called back to work are not showing up and this is further hurting the paltry service levels ostensibly available for tax support.

Last week the Internal Revenue Service Advisory Council (IRSAC) issued its annual report for 2018. Among its findings regarding the state of the IRS is the state of enforcement. In fact, accounts payable departments need to be careful going into 2019.

That's because, beetween 2010 and 2018 the percentage of the IRS budget going strictly toward enforcement has been on average each year as high as 40 percent! Moreover, very large organizations (we are talking organizations with billions of dollars per year in revenue) are being audited at a 58 percent rate.

The Tax Cuts and Jobs Act passed late in 2017 made enormous changes to many long-standing 1099/W-2 reporting situations. This includes new information reporting requirements for certain life insurance contracts.