IRS Resources
for
Payroll Professionals
October 16, 2014
Tom Sheaffer
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Leading advocate for advancement of payroll professionals•
Connects payroll industry with employers and government•
Provides the following to payroll professionals:–
Education•
Bullet (28 pt.)–
Bullet (28 pt.)•
Bullet (28 pt.)Search “Payroll Professional”
IRS.gov
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Legislative changes•
News releases and announcements•
Employment tax procedures•
Reminders and tips•
Bullet (28 pt.)–
Bullet (28 pt.)•
Bullet (28 pt.)Payroll Professionals Tax Center
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Bullet (28 pt.)–
Bullet (28 pt.)•
Bullet (28 pt.)IRS Video Portal
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Bullet (28 pt.)–
Bullet (28 pt.)•
Bullet (28 pt.)Information and links to:
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PTIN registration•
E-Services•
Tax Forums•
Ways to stay informed•
“Hot Topics”“for Tax Pros” Page
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Conduct business with the IRS electronically•
Available only to approved IRS business partners•
Available 24/7•
Register online•
For assistance after registering contact the•
Receive e-file messages affecting e-file transmitters, software developers and authorized IRS e-file providers•
Four categories: 1. Alerts2. Technical
3. General Notifications
4. General IRS e-file Service Center Messages
Stay Informed with QuickAlerts
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IRS2Go app•
YouTube•
Twitter: @IRStaxpros•
Tumblr@IRSnews – IRS news and guidance for the public, the press and practitioners:
http://twitter.com/irsnews
@IRStaxpros – IRS news and guidance for tax professionals:
http://twitter.com/irstaxpros
@IRSenEspanol – IRS en Español (IRS in Spanish):
http://twitter.com/irsenespanol
Follow IRS on Twitter
Stakeholder Liaison Headquarters’ monthly payroll industry calls
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First Thursday of each month•
1:00 p.m. Eastern•
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 moreShare IRS Electronic
Communications
How It Works
Questions?
Social Security Policy Changes
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After 8/1/14, SSA will not issue SSN printouts•
Social Security offices would continue to provide benefit verification letters until further notice.Third Party Payer
September 11, 2014
Tom Sheaffer
Payroll Service Providers (PSPs)
Many employers outsource their payroll and related tax duties, the 3rd party payers will:
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Administer payroll and employment taxes•
Provide assistance in meeting filing deadlines and deposit requirementsCommon third party arrangements include:
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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 2013-9 Tips for Employers Who Outsource Payroll Duties
Types of Third Party Payers
Electronic Federal Tax Payment System
The EFTPS is:
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Mandatory•
Secure, accurate and easy to use•
Available to be viewed online after enrollmentEmployment Tax Investigations
Can result in:
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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.”
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Liabilities for employers who are ultimately responsible for the payment of income tax withheld (employer and employee portions of social security and Medicare taxes).•
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 941Additional Medicare Tax
(AdMT) – Employers
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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: $200,000AdMT – Employee
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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•
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 $540AdMT – Example
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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 forThree categories of evidence:
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Behavioral control: Instruction, evaluation,training
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Financial control: Investment, method ofpayment, ability to make a profit or incur a loss, services available to others
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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
Independent Contractor or
Employee
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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 compensationVoluntary Classification
Settlement Program
Eligible Businesses:
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Must have consistently treated workers as nonemployees•
Must have filed Forms 1099 for nonemployees for previous three years•
Cannot be under examination by IRS•
Zero (or very small) wages paid and significant distributable income•
Officer performs significant services•
Employment taxes reduced or eliminated•
Case study: WatsonCompliance Focus
1120S Officers’ Compensation
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Business connection - Reg. §1.62-2(d)•
Substantiation - Reg. §1.62-2(e)•
Return of excess - §1.62-2(f)•
Compliance issues:Compliance Focus
Accountable Plans
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Individual Taxpayer Identification
Number (ITIN)
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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 ProgramITIN Program Changes
Application Process
Changes impacting individuals:
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Applying directly to the IRS, only original identification documentation or copies certified by the issuing agency accepted•
Other avenues available for verification of key documents39
ITIN Program Changes
Acceptance Agent Program
Changes impacting Certifying Acceptance Agents:
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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 12/31/13Identity Theft
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Stopping identity theft and refund fraud is a top priority for the IRS•
Efforts expanded in 201341
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Increased identity theft screening filters•
Increased number of identity theft investigations•
Nationwide enforcement sweepsIdentity Theft – Fraud Prevention
Two identity theft programs expanded in 2013:
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Taxpayer Protection Program•
Law Enforcement Assistance Program43
Two identity theft programs expanded in 2013:
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Taxpayer Protection Program•
Law Enforcement Assistance ProgramIdentity Theft – Early Detection
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Identity Protection Personal Identification Numbers expansion•
Victim case resolution•
Expanded service options: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 emails 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
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Retired on Sept 2, 2013•
Former DA users, mail / fax completed Form 2848 or Form 8821 to IRS47
e-services secure mailbox
Transcript Delivery System
Additional E-Services
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TIN matching•
Income Verification Express Services49
Online Tools & Resources
Online Tools and Resources
Popular online tools used by tax professionals:
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Affordable Care Act tax provisions•
Information reporting center•
Tax Trails / Interactive Tax Assistant•
First-Time Homebuyer Credit51
Online Tools and Resources
Popular online tools used by tax professionals:
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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 servicesGet Transcript Landing Page
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Electronic filing–
118.8 million Individual returns electronically filed in calendar year 2012–
140.5 million projected for CY2020•
Centralized Campus Operations–
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Available to all practitioners with valid third party authorizations; services include:
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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 verificationPractitioner Priority Service
®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
Payroll Professionals Tax Center
Third Party Reporting Information
Center
IRS Video Portal
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Provides mechanism for raising concerns–
IRS policies, practices and procedures–
Systemic problemsIssue Management Resolution
System
What’s New on IRS.gov
Topic Search Word(s)
Electronic Newsletters (payroll providers, small businesses and tax professionals)
e-news subscribe
Multimedia Center (audio, video and text) multimedia center Social Media (iTunes, podcasts, Twitter,
widgets, YouTube and IRS2Go mobile app) *Follow IRS on Twitter @IRSTaxpros
new media
Video Portal
- Your Guide to an IRS Audit
- Virtual Small Business Tax Workshop
www.irsvideos.gov
Basic Tools for Tax Professionals basic tools E-Services – Online Tools for Tax Pros Eservice
Tax Information for Tax Professionals information for tax professionals
