IRS Commissioner, FTC Data Privacy Director to Speak at APA CongressBy Scott Mezistrano, CPP, and William Dunn, CPP
Douglas Shulman, Commissioner of the Internal Revenue Service, and Mark Eichorn, Assistant Director of the Federal Trade Commission's Division of Privacy & Identity Protection, will speak during general sessions at the 28th Annual Congress May 25-29, just outside Washington, D.C.
Commissioner Shulman will speak on May 27, on topics including:
*Random employment tax audits under IRS's National Research Program
*Substantiation and taxation of employer-provided cell phones
*The option to print just the last four digits of an individual payee's taxpayer identification number on paper Forms 1098, 1099, and 5498 provided to payees
*Results of audits of backup withholding from payments to independent contractors
*The latest economic stimulus to be executed through the payroll function
Identity Security a Primary Mission of the FTC
While a number of federal agencies, including the IRS, have divisions that focus on privacy and identity theft issues, these topics are the primary mission of the Federal Trade Commission. Mark Eichorn, Assistant Director of the FTC's Division of Privacy & Identity Protection, will address these issues as well as the Red Flags Rule, during the May 28 General Session.
Congress to Spotlight APA Lobbying Efforts
In several workshops at Congress, members will learn about the lobbying efforts APA has successfully undertaken and those that are still in progress.
In the "APA Lobbying Efforts-Wage Payments and Deductions" workshop, members will hear about the association's efforts to improve employers' ability to complete some of the most basic elements of payroll: paying employees and complying with mandatory withholding orders. There will be a discussion about direct deposit, paycards, paperless payroll, as well as child support and creditor garnishments.
The payroll function collects and deposits two thirds of our nation's tax revenue. And while employment is the immigration magnet, companies may employ only those with authorization to work. In the workshop, "APA Lobbying Efforts-Tax and Immigration," the impact of stimulus programs on Forms 941 and W-2 will be discussed, as well as APA's comment to IRS on cell phone taxation and TIN-masking, improvements to tax forms and publications, healthcare reform, tax exemptions for military spouses, and improvements being made to the I-9 and E-Verify processes.
But that's just the tip of the iceberg. Representatives from many government agencies will be presenting a wide variety of workshops, as will experts from within APA's membership. Visit www.americanpayroll.org/congress for more information on APA's 28th Annual Congress, including program description, hotel information, registration, and tips to get your manager's approval of the trip.
APA to Congress: Remove Payroll System Obstacles in HIRE Act
Read the March edition of Inside Washington to learn about:
* APA recommended changes in legislative language to remove hurdles for payroll systems contained in the Senate-passed version of the Hiring Incentives to Restore Employment Act. Between the publishing of Inside Washington and PAYTECHonline, the House-passed version of the bill addressed those issues! We also discussed potential changes to Form 941 to accommodate this stimulus with a minimum of burden for employers and IRS.
*APA member Debbie Lindenmuth, CPP, testified before the Kansas Senate Judiciary Committee in order to "… streamline the garnishment process for everyone involved and also reduce the amount of money debtors will pay to settle their debts." The bill was passed by the Senate and is expected to be discussed in the House this spring.
* APA members Carl Morris and Bill Dunn, CPP, testified on paycard bills in Vermont and Connecticut. Vermont would require three free transactions per pay period.
You can always learn more about the lobbying activities of APA's Washington office and the six subcommittees of the Government Affairs Task Force by visiting the Government Relations section of the APA website. For example, check out the minutes of the latest meetings of the Immigration Subcommittee.
"Lucky" Employers Will Be Notified Soon of Selection for New IRS Employment Tax Audits
IRS Chief Counsel Expects Final Cafeteria Plan Regulations in June 2010
By Scott Mezistrano, CPP
The Internal Revenue Service is revving up its Employment Tax National Research Program, the first comprehensive employment tax compliance study in 25 years. The employers to be audited in 2010 have been selected by the IRS, and they will be notified within 30 days, said John Tuzynski, Chief Employment Tax Operations, at the monthly conference call between IRS and payroll industry leaders.
The bulk of the 2,000 employers to be selected in each of 2008, 2009, and 2010 are in the Small Business and Self-Employed division, according to Mary Gorman, of the office of IRS Chief Counsel. Employers in the SB/SE division are those with assets under $10 million. The other IRS divisions serving employers are the Large and Mid-size Business division and the Tax-Exempt and Government Entities division.
There are two main goals for these 6,000 audits:
1. Measure the employment tax contribution to the tax gap. The last assessment of this was made in the 1980s, and the number has just been adjusted for inflation since that time. In 2001, it was estimated at $54 billion.
2. Determine current characteristics of compliance and noncompliance so that future audit selections and procedures can be more effective and efficient and waste less of taxpayers' time.
This topic will be discussed in greater detail at the IRS presentations during the 28th Annual Congress May 25-29 in Washington, D.C. For more information, see the workshop, "Top 10 Things You Need to Know About Employment Tax" and "Dealing With the IRS" on pages 39 and 40 of the Congress brochure
Two other items revealed at the March 4 conference call:
*IRS Chief Counsel expects to issue final regulations on cafeteria plans by the end of June 2010. When the proposed rules were issued in August 2007, it was anticipated that the rules would be finalized in time to be effective for plan years beginning on or after January 1, 2009. For more information on the proposed regulations and APA's comments and testimony on them, see the Government Relations page
of APA's website. *IRS no longer has on its website the "Estimated Schedule for Posting Tax Products (Tax Forms, Publications, Instructions)." IRS found it was creating expectations it could not fulfill, according to Sherry Saucerman, Senior Tax Analyst in IRS's office of Payroll and Practitioner Liaison.
APA Member Gives Guidance on Handling an IRS Audit in SSA/IRS Reporter
By Scott Mezistrano, CPP
Be sure to read the spring 2010 edition of the SSA/IRS Reporter. APA's own David M. Young, CPA, provided the article, "Tips on Dealing with an IRS Audit."
As Young recommends to the six million employers who get the Reporter in the mail with their Form 941 and to thousands of tax professionals who view it online, "you should establish an internal team that will coordinate your organization's participation during the examination. This may include representation from payroll, accounts payable, accounting, human resources, internal auditing, general counsel, and outside tax professionals."
He also suggests that there should be an employee designated as the audit controller who will review all information before it is turned over to the IRS, and he explains the method by which the IRS must request any data or documents. He even discusses how to handle issues that cannot be resolved with the IRS examiner.
Read the current SSA/IRS Reporter, featuring APA's "Tips on Dealing With an IRS Audit" article. While you're there, check out the mention of the 28th Annual Congress on page 6.
Young is the Associate Treasurer and Risk Manager for Kent State University, where he also teaches courses in tax accounting. He serves on APA's Board of Directors and is a member of APA's National Speakers Bureau. Young is also a past chair of the Taxation Council of the National Association of College and University Business Officers.
APA, IRS, and SSA -- A Great Alliance
APA articles have been a regular feature in the SSA/IRS Reporter since the fall 2003 edition. APA's contributor status helps fulfill the Association's mission to educate the payroll community, in addition to providing great exposure for the organization before all employers and thousands of tax professionals. It is also evidence of the ongoing partnership among APA, IRS, and SSA.
Read current and back issues of the Reporter at the IRS website.