IRS Resources for Payroll Professionals

Transcription

1 IRS Resources for Payroll Professionals Tom Sheaffer October 16, 2014 American Payroll Association Leading advocate for advancement of payroll professionals Connects payroll industry with employers and government Provides the following to payroll professionals: Education Skills Resources 1

2 Search Payroll Professional IRS.gov Bullet (28 pt.) Bullet (28 pt.) Bullet (28 pt.) E-News for Payroll Professionals Legislative changes News releases and announcements Employment tax procedures Reminders and tips 2

3 Payroll Professionals Tax Center Bullet (28 pt.) Bullet (28 pt.) Bullet (28 pt.) Local Meetings and Seminars Bullet (28 pt.) Bullet (28 pt.) Bullet (28 pt.) 3

4 IRS Video Portal for Tax Pros Tab Bullet (28 pt.) Bullet (28 pt.) Bullet (28 pt.) 4

5 for Tax Pros Page Information and links to: PTIN registration E-Services Tax Forums Ways to stay informed Hot Topics E-Services Conduct business with the IRS electronically Available only to approved IRS business partners Available 24/7 Register online For assistance after registering contact the e-help Desk at

6 Stay Informed with QuickAlerts Receive e-file messages affecting e-file transmitters, software developers and authorized IRS e-file providers Four categories: 1. Alerts 2. Technical 3. General Notifications 4. General IRS e-file Service Center Messages IRS Social Media IRS2Go app YouTube Tumblr Facebook Podcasts 6

7 Follow IRS on IRS news and guidance for the public, the press and practitioners: IRS news and guidance for tax professionals: IRS en Español (IRS in Spanish): SL HQ Payroll Industry Calls Stakeholder Liaison Headquarters monthly payroll industry calls First Thursday of each month 1:00 p.m. Eastern 7

8 Share IRS Electronic Communications IRS e-newsletters and other electronic communications include a icon Click the icon and share the information on social medic platforms such as: Facebook Twitter Goggle + And more How It Works 8

9 How It Works How It Works 9

10 Questions? Social Security Policy Changes After 8/1/14, SSA will not issue SSN printouts Social Security offices would continue to provide benefit verification letters until further notice. 10

11 Third Party Payer Tom Sheaffer September 11, 2014 Payroll Service Providers (PSPs) Many employers outsource their payroll and related tax duties, the 3 rd party payers will: Administer payroll and employment taxes Provide assistance in meeting filing deadlines and deposit requirements Streamline business operations 11

12 Types of Third Party Payers Common third party arrangements include: Payroll Service Providers (PSPs) Reporting Agents Section 3504 Agents Professional Employer Organizations (PEOs) Reminder: Employers are ultimately responsible for the payment of income tax withheld (employer and employee portions of social security and Medicare taxes). See Fact Sheet Tips for Employers Who Outsource Payroll Duties Electronic Federal Tax Payment System The EFTPS is: Mandatory Secure, accurate and easy to use Available to be viewed online after enrollment Accessible by an Inquiry PIN The system: Provides immediate confirmation for each transaction Maintains a history for 16 months 12

13 Employment Tax Investigations Can result in: Prosecutions of individuals and companies, acting under the guise of a third party payroll service. For more information, visit IRS.gov and type in the key search words employment tax investigations. Liabilities for employers who are ultimately responsible for the payment of income tax withheld (employer and employee portions of social security and Medicare taxes). Additional Medicare Tax (AdMT) Employers Applies to tax years beginning after 12/31/2012 Employers are required to withhold 0.9 percent AdMT on wages or compensation paid to an employee in excess of $200,000 in the calendar year A new line 5(d) for reporting AdMT withholding was added to Form 941 The amount withheld will be reported with regular Medicare tax on Form W-2 Box 6 13

14 AdMT Employee Provides for 0.9 percent AdMT on wages, compensation and self-employment income received above certain threshold amounts Thresholds amounts based on filing status Threshold amounts: Married Filing Jointly: $250,000 Married Filing Separately: $125,000 All others: $200,000 AdMT Takeaways Individuals can t request withholding specifically for AdMT, but may request additional income tax withholding on Form W-4 Individuals may also need to consider making estimated tax payments True Up Applies to tips and SE Income if in excess of the applicable threshold amount No employer match 14

15 AdMT Example J and L file a joint return J has $150,000 in wages and L has $160,000 in wages Neither one s wages in excess of $200,000 thus no withholding by their employers Combined $310,000 in wages is more than the $250,000 threshold for joint filers J and L are liable to pay additional Medicare Tax on $60,000, or $540 Form 1099-MISC Compliance Form W-9 Secure correct TIN right from the start Issue Forms 1099-MISC IRS CP 2100 or CP 2100A for returns filed with missing or incorrect TINs Payer may be required to backup withhold for missing and incorrect name/tins Information return penalties 15

16 Independent Contractor or Employee Three categories of evidence: Behavioral control: Instruction, evaluation, training Financial control: Investment, method of payment, ability to make a profit or incur a loss, services available to others Relationship of the parties: Written contract, permanency, integral part of business Independent Contractor or Employee Tax court considerations: Degree of control Investment in facilities Options for profit and loss Right to discharge Integral part of business Permanency of relationship 16

17 Voluntary Classification Settlement Program Originally released 9/21/2011 Eligibility expanded January 2013 Simple application and process Audit protection for past years Taxpayer agrees to: Prospectively treat a class or classes of workers as employees Small payment required just over 1 percent of compensation VCSP Eligibility Eligible Businesses: Must have consistently treated workers as nonemployees Must have filed Forms 1099 for nonemployees for previous three years Cannot be under examination by IRS Cannot be under examination by DOL or state regarding worker classification Can be tax-exempt organization or gov entity 17

18 Compliance Focus 1120S Officers Compensation Zero (or very small) wages paid and significant distributable income Officer performs significant services Employment taxes reduced or eliminated Case study: Watson Compliance Focus Accountable Plans Business connection - Reg (d) Substantiation - Reg (e) Return of excess (f) Compliance issues: Travel reimbursements Tool reimbursements 18

19 Individual Taxpayer Identification Number (ITIN) IRS issues ITINs to individuals required to have a U.S. taxpayer identification number and are not eligible to obtain an SSN Effective Jan 1, 2013, the IRS implemented new procedures affecting Application process Acceptance Agent Program 37 ITIN Program Changes Application Process Changes impacting individuals: Applying directly to the IRS, only original identification documentation or copies certified by the issuing agency accepted Other avenues available for verification of key documents ITINs issued for a five-year period rather than indefinite 38 19

20 ITIN Program Changes Acceptance Agent Program Changes impacting Certifying Acceptance Agents: CAAs allowed to use Form W-7 COA (Form 14194) certifying ITIN application documents reviewed / verified Attach original or certified documents to COA New / stronger due diligence requirements CAAs must be covered under Circular 230 Complete forensic training by 12/31/13 39 Identity Theft Stopping identity theft and refund fraud is a top priority for the IRS Efforts expanded in 2013 Fraud prevention Early detection Victim assistance 40 20

21 Identity Theft Fraud Prevention Increased identity theft screening filters Increased number of identity theft investigations Nationwide enforcement sweeps 41 Identity Theft Early Detection Two identity theft programs expanded in 2013: Taxpayer Protection Program Law Enforcement Assistance Program 42 21

22 Identity Theft Early Detection Two identity theft programs expanded in 2013: Taxpayer Protection Program Law Enforcement Assistance Program 43 Identity Theft Victim Assistance Identity Protection Personal Identification Numbers expansion Victim case resolution Expanded service options: Identity Protection Specialized Unit ( ) Free credit monitoring 44 22

23 Pervasive Telephone Scams Scammers use fake names and IRS badge numbers. They generally use common names and surnames to identify themselves. Scammers may be able to recite the last four digits of a victim s Social Security Number. Scammers spoof the IRS toll-free number on caller ID to make it appear that it s the IRS calling. Scammers sometimes send bogus IRS s to some victims to support their bogus calls. Victims hear background noise of other calls being conducted to mimic a call site. After threatening victims with jail time or driver s license revocation, scammers hang up and others soon call back pretending to be from the local police or DMV, and the caller ID supports their claim. E-Services Disclosure Authorization and Electronic Account Resolution Retired on Sept 2, 2013 Former DA users, mail / fax completed Form 2848 or Form 8821 to IRS Former EAR users, call Practitioner Priority Service to resolve account-related issues 46 23

24 Transcript Delivery System e-services secure mailbox 47 Additional E-Services TIN matching Income Verification Express Services Preparer Tax Identification Number application 48 24

25 Online Tools & Resources 49 Online Tools and Resources Popular online tools used by tax professionals: Affordable Care Act tax provisions Information reporting center Tax Trails / Interactive Tax Assistant First-Time Homebuyer Credit Exempt organizations Calculators Income tax withholding Sales tax deduction 50 25

26 Online Tools and Resources Popular online tools used by tax professionals: Where s My Amended Return? Online Transcript Orders Online Payment Agreement Offer in Compromise Pre-Qualifier Tool Online Employer Identification Number Foreign issues Electronic subscriptions services 51 Get Transcript 26

27 Get Transcript Landing Page IRS Campus Operations Electronic filing million Individual returns electronically filed in calendar year million projected for CY2020 Centralized Campus Operations Improve efficiency Increase consistency 54 27

28 Practitioner Priority Service Available to all practitioners with valid third party authorizations; services include: Locating and applying payments Resolving taxpayer account problems Explaining IRS communications Providing procedural guidance Providing transcripts of taxpayer accounts Provide Forms 1099 and W-2 information Securing taxpayer income verification 55 E-News for Payroll Professionals IRS e-newsletters now include a icon at the top right and bottom left of each issue Click on the icon and bring up more than 300 ways to bookmark and share the information Recipients can: Post it on Facebook Tweet it on Twitter Place it in a blog Choose other ways to share the pre-packaged link 28

29 Payroll Professionals Tax Center Third Party Reporting Information Center 29

30 IRS Video Portal Issue Management Resolution System Provides mechanism for raising concerns IRS policies, practices and procedures Systemic problems Facilitates issue identification, resolution and feedback 60 30

31 What s New on IRS.gov Topic Electronic Newsletters (payroll providers, small businesses and tax professionals) Multimedia Center (audio, video and text) Social Media (itunes, podcasts, Twitter, widgets, YouTube and IRS2Go mobile app) *Follow IRS on Video Portal - Your Guide to an IRS Audit - Virtual Small Business Tax Workshop Basic Tools for Tax Professionals E-Services Online Tools for Tax Pros Tax Information for Tax Professionals Search Word(s) e-news subscribe multimedia center new media basic tools Eservice information for tax professionals Thank you! Thomas.a.sheaffer@irs.gov