Articles and Tax Tips
On January 6, 2012 the IRS released a brand new set of tax gap estimates for TY2006. This is the first update since the one for TY2001. All told, the gross tax gap has increased from $345 billion dollars to $450 billion and the IRS has singled out underreporting of income amongst businesses and corporations as among the primary reason for this gap. So, what does this mean for you?
Nexus is a legal term of art that describes the connection you have with a specific state, such that you are subject to those state tax requirements. Determining nexus is far from simple and is highly fact and circumstance dependent. As such the analytical framework that you develop will be a key component of your state level compliance and reporting efforts. What follows are twenty key elements/questions that you should consider in determining whether or not you have nexus with a particular state.
Given filing season is right around the corner one of the most important tasks every AP department should be engaging in well before the new year starts is to “validate the vendors.” With data validation in mind, the following thirteen tips are therefore designed to help you prepare for a smooth filing season in 2012:
TIP #1: Run your payees through the Free IRS TIN Match Program, checking for name/TIN mismatches
By Steven D. Mercatante Esq.
In recent years, the IRS has noticeably ramped up its efforts to close the tax gap (gap between tax revenue owed to the IRS and what the IRS collects). Increasing enforcement measures, including massively expanded audit programs, targeted at third party reporters (third party reporters chiefly include organizations making payments to non-employees) are among the primary means the IRS has sought to close a tax gap estimated at well over $300 billion in 2010. The period of minimal IRS Form 1099 examinations has long since ended.
This month's article focuses on an issue that recently came to my attention when speaking at IAPP's Fusion 2011 Conference in May - one that has crucial importance to AP departments and their staffs all across the country.