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APA Offers IRS Recommendations on FAQ Compliance Value

BY: Alice P. Jacobsohn, Esq. | 08/26/20

The APA Government Relations Task Force IRS Issues Subcommittee sent a request to the IRS to reconsider its position on the value of Frequently Asked Questions (FAQs) for purposes of compliance.

In her July 7 blog post, National Taxpayer Advocate (NTA) Erin Collins describes a problem with the IRS’s use of online FAQs. The IRS says that FAQs cannot be used by taxpayers to justify underpayment of taxes. When payroll professionals rely on the information found on the IRS website and the IRS later changes that information, employers may find themselves in a noncompliant situation due to no fault of their own, APA said.

Payroll professionals usually rely on official publications for compliance matters. However, when information cannot be easily found or questions arise from a form, instruction, or publication, payroll professionals look to the IRS website before contacting the agency. An online FAQ may provide an answer directing a reader to an official publication, but when the answer is not available in an official publication, payroll professionals may rely on the FAQs.

APA recommended changes to the IRS’s FAQ procedures to protect payroll professionals and their employers. “While APA understands that an FAQ may be changed or removed because of new laws, court decisions, and IRS interpretations, reliance on the original information must protect payroll professionals and their employers from liability and penalties,” APA said.

APA asked the IRS to archive changed or removed FAQs from the IRS website, provide a list of changed or removed FAQs with a date of when the change was made, relieve employers of penalties when they prove reliance on a changed or removed FAQ, and provide employers with time to adjust processes to accommodate a change in requirements.

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Alice P. Jacobsohn, Esq., is Director of Government Relations for the APA.