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05/09/2019

Certain tax-exempt organizations must file 990-series returns by Wednesday, May 15, the deadline for organizations operating on a calendar year.

IRS building sign
By law, the Internal Revenue Service and most tax-exempt organizations are also required to publicly disclose most parts of 990 filings, but release of Social Security Numbers and other personally identifiable information about donors, clients or benefactors could give rise to identity theft.

Tax-exempt forms that must be made public by the IRS are clearly marked “Open to Public Inspection” on the top right corner of the first page. These include the 990, the 990-EZ, the 990-PF and others.

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The IRS also notes that the error rate for e-filed returns is only 1 percent. E-filing also provides acknowledgment that the IRS has received the return and reduces processing time.

Exempt organizations with average annual gross receipts of $50,000 or less can file a 990-N (e-Postcard), which requires only a few pieces of information. Organizations with average annual gross receipts above $50,000 must file a 990 or 990-EZ, depending on their receipts and assets. Private foundations must file a 990-PF.

Organizations that fail to file annual reports for three consecutive years will see their federal tax exemptions automatically revoked as of the due date of the third year for which they are required to file.

02/15/2019

Underpayment Penalty

The IRS announced in IRS News Release IR-2019-3 that it would waive the underpayment penalty for any taxpayer who paid at least 85 percent of their total tax liability during the 2018 tax year. The usual threshold is 90 percent. However, Senate Finance Committee (SFC) ranking member Ron Wyden, D-Ore., has said that the IRS should "do more."

"Instead of penalizing those who paid less than 90 percent of what they owed in 2018, now they’re penalizing those who paid less than 85 percent," Wyden said on February 7 from the Senate floor. "That was one small step in the right direction," he added.

Before the IRS’s news release, Wyden wrote to Treasury and the IRS urging the waiver of underpayment penalties for withholding errors related to the Tax Cuts and Jobs Act (TCJA) ( P.L. 115-97). Although the IRS did lower the penalty threshold for the 2018 tax year, Wyden stated on February 7 that "nobody should be penalized for the Trump administration’s mistakes on tax withholding."

Democrats are largely opposed to the TCJA as a whole, and claim that Republicans’ tax code overhaul was rushed. Thus, significant tax withholding errors and underpayments are expected to be incurred. "Change the penalty thresholds. Extend safe harbors. Whatever needs to happen," Wyden said.

Additionally, several Republicans have also voiced their concern about the expected increase in underpayment related to withholding. SFC Chairman Chuck Grassley, R-Iowa, recently urged the IRS to be "lenient" on underpayment penalties for 2018, as it is the first tax year since tax reform implementation.

AICPA

The American Institute of Certified Public Accountants (AICPA) has likewise urged Treasury and the IRS to provide more extensive penalty relief. "The substantial uncertainty surrounding the implementation of the TCJA and the updated federal tax withholding tables presented a challenge for many taxpayers in understanding and accounting for their tax liability," Annette Nellen, chair of the AICPA’s Tax Executive Committee said in a recent letter to Treasury and the IRS. The AICPA has recommended an 80 percent threshold for the underpayment penalty waiver.

The independent contractor filing blues | Accounting Today 12/26/18, 11(35 AMhttps://www.accountingtoday.com/news/the-in...
12/26/2018

The independent contractor filing blues | Accounting Today 12/26/18, 11(35 AM
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The independent contractor filing blues
By Roger Russell
Published December 24 2018, 9∶30am EST
More in Tax records, Payroll taxes, IRS
The acceleration of the due date for filing independent contractor forms with the Internal
Revenue Service has put pressure on small businesses and their tax preparers.
Independent contractor forms, along with W-2s, are now due to the IRS by Jan. 31, 2019. The
date was moved up by the PATH Act, which also moved the filing deadline for W-2s to the
earlier date. The earlier date helps the IRS more efficiently verify income that individuals
report on their tax returns and helps prevent fraud.
“States tend to follow the federal government,” said Todd Waletzki, president of the payroll
division of BenefitMall, a large payroll company and the largest general agency helping
brokers provide insurance benefits for small businesses.
“We are seeing filing deadlines being compressed, and it compels us to keep our clients
informed of accelerating deadlines and help them close out year-end taxes in a timely
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manner,” he said. “We file employment tax returns, such as Form 921, and provide packages
to our clients and their CPAs to help them file their business returns.”
“There used to be separate due dates, one for the payee form on January 31, and one for
the IRS version due on February 28,” said Vincent O’Brien, of Vincent J. O’Brien CPA PC.
The earlier due date only applies if Box 7 on Form 1099-MISC is checked, according to
O’Brien.
“If you have a 1099-MISC with other information, then it won’t be due on the earlier date,”
he said. “That time frame compresses tax season a lot. But if you’re reporting anything other
than Box 7, non-employee compensation, then the end-of-February due date still applies.”
“And it goes beyond that. If you pay someone other than a corporation, you are required to
send them a Form 1099 for payment for their services if it amounts to more than $600,” he
continued. “That would include someone like a plumber or electrician that comes to the
office. If they’re organized as a corporation such as ‘Acme Plumbing Inc.,’ it wouldn’t be
necessary to complete Form 1099-MISC for them, but if they’re organized as a sole
proprietor you have to send the form. There are severe penalties if you don’t.”
The same holds true for clients of an accounting firm, O’Brien noted. “If the accounting firm
is organized as a partnership or an LLC but is not incorporated, the accounting firm’s clients
are supposed to send the firm a 1099 if their payments to the firm amounted to more than
$600 in the aggregate during the year.”
The thorniest of issues
The classification of a worker as an independent contractor rather than a worker can be
exceedingly complex, and depends on the facts and circumstances of each case. The
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determination is based on whether the person for whom the services are performed has the
right to control how the worker performs the services.
“An employee is technically controlled by the employer, managing what they do, how they
do it, and when they do it,” said BenefitMall’s Waletzki. “However, an independent
contractor may be told what project is needed and when it’s due, but they are in control of
the way they go about it.”
Both of these statuses have pros and cons, according to Waletzki. “Some advantages of
hiring employees include the fact that the hourly wage is usually less, the employee is
routinely available to work 30-plus hours a week, and can require less training.
Disadvantages of hiring employees include the cost of providing benefits, consistently
scheduled payment, and increased payroll paperwork.”
“With an independent contractor, overall cost can be less and employers are provided more
flexibility when it comes to replacement and assignment,” Waletzki said. “Additionally, the
independent contractor handles licensing and permits. However, some of the disadvantages
include less control over the individual. Since the independent contractor’s time is their own,
they can say no to a project, and have no sense of loyalty.”
Employers who mislabel their workers as employees escape the obligation of paying
minimum wages, overtime, payroll taxes, worker’s compensation, unemployment, Social
Security, health benefits, paid leave, and retirement benefits. Workers themselves benefit by
being classified as independent contractors by being able to deduct certain business
expenses that are not available to employees, the ability to set up their own retirement
plans, and the fact that they are not subject to withholding.
But there are serious consequences to misclassification of a worker as an independent
contractor. If the worker is determined by the IRS to be an employee, the business is liable
for the taxes it neglected to withhold, in addition to the employee’s share, plus interest and
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penalties.
The filing of Form 1099-MISC helps employers protect the status of a worker as an
independent contractor, according to Waletzki.
“Employers provide one copy to the contractor and another to the IRS. The independent
contractors use the forms to keep track of their own income for tax purposes,” he said.
“Since they self-pay F**A taxes, employers do not deduct any payroll taxes from contractor
pay.”
The IRS has kept a close eye on this issue in the past several years, Waletzki noted.
“Employees tend to be more expensive than independent contractors, since the employer
must withhold federal income tax and F**A taxes on the wages of the employee, pay state
taxes and any benefit premiums,” he said. “None of these taxes apply to independent
contractors, so employers have a financial enticement to prefer them. But they should know
that misclassifying workers is bound to bring hefty penalties and fines.”
And it’s easy for a business or accountant to make a mistake because there is no bright-line
test. The IRS has used both a 20-factor test based on common law principles, which it has
condensed into a three-part test focusing on behavioral control, financial control, and the
relationship of the parties. States may follow the federal tests or have their own more
restrictive rules.
Recently, the California Supreme Court adopted a new three-part test to make the
determination under California’s wage orders, which regulate wages, hours and working
conditions, Waletzki said.
This new “ABC” test requires a company to establish three factors to classify a worker as an
independent contractor:
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A. The worker is free from the control and direction of the hirer in connection with the
performance of the work, both under the contract for the performance of such work and in
fact;
B. The worker performs work that is outside the usual course of the hiring entity’s business;
and,
C. The worker is customarily engaged in an independently established trade, occupation or
business of the same nature as the work performed for the hiring entity.
“Prior to the ABC test, the Borello analysis was the primary consideration in determining if
an employment relationship existed,” Waletzki said. “This analysis focused on whether the
company has the right to control the manner and means in which the worker performs tasks
and completes projects.”
And for those that are unsure whether certain workers are employees or independent
contractors, the IRS is happy to help.
The request to have the IRS make the determination can be made by a firm or a worker,
and is submitted on Form SS-8, “Determination of Worker Status for Purposes of Federal
Employment Taxes and income Tax Withholding.”
Roger Russell
􀀁

12/19/2018

Year-end 2018 sees the end of the first year of the Tax Cuts and Jobs Act (TCJA), the most significant tax legislation in the Unites States in more than 30 years. While one of the claimed benefits of tax reform was the simplification of filing and the lowering if income tax rates, there are still many steps that individuals can take that can lower their tax bills. Planning during the final weeks and months of this year involves much more –both in terms of traditional year-end strategies and strategies developed in response to developments that have taken place since last year. Here are some points to consider:

Data gathering. Year-end planning should start with data collection and a review of prior year returns. This includes information on losses or other carryovers, estimated tax installments, and items that were unusual. Conversations regarding next year should include discussions of any plans for significant purchases or dispositions, as well as any possible life cycle events.

Income tax rates. One of the most significant factors in tax planning for individuals is their tax bracket. The most direct control taxpayers have over their tax bracket rests in their ability to control the timing of income and deductible expenses. For example, taxpayers who expect to be in a lower tax bracket in 2019 should consider deferring income to 2019 and accelerating deductions into 2018. While tax brackets seem as though they will be relatively stable for the next few years, individual circumstances could mean a shift in brackets from year to year.

Investments. Taxpayers holding investments, whether in the form of securities, real estate, collectibles, or other assets, often have an opportunity to reduce their overall tax bill by some strategic buying and selling toward the end of the year, as well as, exchanging appreciated assets for like-kind property in order to defer gains. Balancing tax considerations with other factors is part of the challenge in dealing with investments, including: the ordinary income tax rates, the net investment income tax rate, the capital gain rates, and the alternative minimum tax (AMT).

Income caps on benefits. Monitoring adjusted gross income (AGI) at year-end can also pay dividends in qualifying for a number of tax benefits. Often tax savings can be realized by lowering income in one year at the expense of realizing a bit more in another year.

Life events. The biggest variables for many taxpayers impacting their year-end tax planning surrounds life events such as marriage, divorce, birth or adoption of a child, a new job or the loss of a job, and retirement. These life events may, for instance, result in a change in filing status that will affect tax liability. The possibility of significant changes and/or significant or unusual items of income or loss should also be part of a year-end tax strategy. Additionally, taxpayers need to take a look into the future and predict, if possible, any events that could trigger significant income, losses, or deductions.

2018 tax law changes. Nearly all of the provisions of TCJA came into effect during 2018. There are many new tax laws that individuals should be aware of.

Alimony. One very significant change that comes into effect January 1, 2019, is the treatment of alimony. Beginning with divorces and separation agreements entered into after December 31, 2018, alimony or separate maintenance payments are no longer deductible by the payor, nor includible in the income of the payee. This change does not affect divorce or separation agreements entered into before 2019, nor those altered after 2018 where the changed method of taxation is not expressly stated to apply.

Medical expenses. TCJA lowered the floor for claiming deductions for medical expenses to 7.5 percent of AGI for all taxpayers, not just those aged 65 or higher, applicable to 2017 and 2018 only.

State and local taxes. TCJA limits the deduction for state and local taxes to $10,000 per year.

Increased standard deduction. One of the most broadly impactful provisions of TCJA was the near doubling of the standard deduction for all taxpayers. For 2018, the standard deduction amounts are $24,000 for joint filers, $18,000 for heads of households, and $12,000 for all other individual filers. This increased amount makes it less likely that it is more advantageous for individuals to itemize deductions.

Miscellaneous itemized deductions. TCJA eliminated miscellaneous itemized deductions for individuals. This includes deductions for unreimbursed employee expenses.

There are still actions that can be taken with regard to all of these new rules, many of which can still be completed before the end of the year.

Timing rules. Timing, and the skilled use of timing rules to accelerate and defer certain income or deductions, is the linchpin of year-end tax planning. For example, timing year-end bonuses or year-end tax payments, or timing sales of investment properties to maximize capital gains benefits should be considered. So, too, sometimes fairly sophisticated “like-kind exchange,” “installment sale” or “placed in service” rules for business or investment properties come into play. In other situations, however, implementation of more basic concepts are just as useful. For example, taxpayers can write a check or can charge an item by credit card and treat these actions as payments. It often does not matter for tax purposes when the recipient receives a check mailed by the payor, when a bank honors the check, or when the taxpayer pays the credit card bill, as long as done or delivered "in due course."

Please feel free to call our offices if you have any questions about how year-end tax planning might help you save taxes. Our tax laws operate largely within the confines of “the tax year.” Once 2018 is over, tax savings that are specific to this year may be gone forever.

Sincerely,

Wiley

05/17/2018

Ohio tax preparer acquitted on tax fraud charges

By Michael Cohn
Published May 16 2018, 2:52pm EDT
More in Tax fraud Tax-related court cases Child tax credits
A tax preparer was found not guilty on 21 counts of tax fraud after a two-week jury trial in a federal court in Akron, Ohio.

Sergio Gardea, 44, of SGO Accounting and Tax Services, was acquitted last week. Prosecutors dropped nine other counts with which Gardea had been charged near the end of the trial. He had faced up to 90 years in prison if he had been convicted on all 30 counts.

The case involved 30 tax returns Gardea filed for clients between 2013 and 2015 at his firm that wrongly claimed Child Tax Credits for people living outside the U.S. SGO provides payroll, bookkeeping and tax services for businesses and individual tax preparation across Northeast Ohio, with offices in both Akron and Canton.

Gardea pleaded not guilty to all charges, insisting he asked the proper questions of clients and accurately prepared returns based on the answers they provided.

His attorney, David M. Garvin, argued the clients couldn’t remember signing a Child Tax Credit information sheet attesting they were honest and properly qualified for the tax credit. He said Gardea was doing his job correctly and asking the right questions of his clients.

The Internal Revenue Service sent in an undercover agent asking Gardea to prepare a return, but Gardea prepared the return without the Child Tax Credit because the undercover client didn’t qualify, Garvin noted. He stated in his closing argument that “no tax preparer in the United States would be safe” if Gardea was found guilty

“I truly believe justice was served today,” Garvin said in a statement. “I think it’s a great, great day for all tax preparers.”

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Garvin is a criminal tax attorney and CPA with offices in Miami. Gardea thanked him for his acquittal.

“I am extremely grateful to my attorney, Mr. David M. Garvin, for his tenacity and brilliance,” Gardea said in a statement. “After almost five years of investigation by the IRS, Mr. Garvin proved my innocence. He worked hard. During the home stretch he worked long hours for over 40 days without a day off. I am indebted to him for my liberty. I also want to thank my family, especially my wife and daughters, my friends and the community, for their unwavering support. Judge John Adams ensured I got a fair trial. He was tough, but fair through the entire process. I thank the jury for their attention during a difficult and lengthy trial.”

03/26/2018

After months of uncertainty and differences between the House and Senate versions we now have a final decision on how the new tax law will deal with alimony. The tax deduction for alimony is unchanged until January 1, 2019. After that alimony will no longer be tax deductible. An agreement or judgment providing for alimony prior to that date will be governed by current law. For most people paying or receiving alimony they will want to finalize things before the new law takes effect. There could be pretty substantial consequences if this deadline is not considered. I have seen some popular articles that promote the idea that the only people who are effected by the new law are people paying alimony. Payors of alimony will not be willing to pay as much if they can’t deduct it which means alimony recipients will suffer. It is also likely that Judges will take into account the new law when making alimony decisions and that means less alimony for recipients. For most couples their collective tax obligation is lower if support is structured as alimony. The recipient is usually content to pay the taxes because he or she is usually in a lower tax bracket than the person making the payments.

01/11/2018

New Trump administration tax guidelines rely on workers to double-check their paychecks
2:02
Trump signs tax bill into law

President Trump signed $1.5 trillion tax bill into law on Dec. 22 in the Oval Office. (The Washington Post)
By Damian Paletta January 11 at 2:13 PM
Millions of Americans will need to use a new Internal Revenue Service online calculator to ensure their new paychecks are accurate, Trump administration officials said Thursday as they issued guidelines for implementing the recently passed tax law.

The guidelines are necessary for businesses to calculate how much to withhold in taxes from employees’ paychecks beginning as soon as next month. The White House said Thursday businesses should make these adjustments by Feb. 15, part of the administration’s push for millions of workers to see bigger paychecks as quickly as possible.

In rushing the process, the Treasury Department is asking companies to rely on outdated forms to help determine how much to withhold.

10/17/2017

IRS scales back program to go after people who don’t file taxes

By Michael Cohn
Published October 16 2017, 3:12pm EDT
More in Tax evasion Tax avoidance J. Russell George IRS TIGTA

The Internal Revenue Service has needed to significantly cut back a program that automatically followed up with people who failed to file a tax return, due to budget constraints, according to a new report.

The report, from the Treasury Inspector General for Tax Administration, blamed resource constraints for the IRS’s curtailment of the Automated Substitute for Return Program, even though it recently brought in billions of dollars a year. From June 2010 through July 2011, the ASFR program collected over $3 billion, but from June 2015 to July 2016 collections plunged to approximately $430 million after it was scaled back.

When a taxpayer who has a tax filing requirement fails to file a tax return, the IRS is allowed to use third-party information to determine a tax liability and assess it. The IRS handles these cases mostly through the ASFR Program, which enforces filing compliance against taxpayers who haven’t filed individual income tax returns but seem to owe a lot of money in taxes. The IRS has mainly used the ASFR Program to focus on “Refund Hold” cases where the IRS holds a refund on one tax year to get an unfiled return for another year. According to the report, if the IRS refocused its priorities away from small Refund Hold cases and instead focused on high net tax due cases, the IRS could collect $843 million over the next five years. The report also contends that if the IRS worked on Refund Hold cases differently, it could have collected $45 million in unpaid taxes by applying tax refunds to amounts owed from prior years in which no tax return was filed.

Refund Hold inventory includes income tax refunds withheld from taxpayers to cover any potential tax liability on an unfiled tax return. Refund Hold cases are considered the highest priority work for the ASFR Program because refunds are held for only six months. High net tax due cases in the ASFR Program are those in which the potential tax liability from an unfiled return is $100,000 or more.

TIGTA’s analysis of 21,533 of the Refund Hold cases worked on under the ASFR Program between June 2011 and November 2016 identified 12,872 cases (or about 60 percent) that were not resolved within six months, and a refund was released to the taxpayer in 8,115 cases. The report noted that if the IRS held these refunds until the ASFR process was completed, it could have potentially applied $45 million to the taxpayers’ accounts.

However, TIGTA also estimates that if the IRS had worked on the same number of high net tax due cases it closed in the period July 2010 through June 2011 in the most current period of July 2015 through June 2016, it would have potentially increased revenue by about $169 million dollars, which is approximately $843 million over the next five years. Replacing 9 percent of the Refund Hold cases the ASFR Program closed during FY 2016 with high net tax due cases would achieve these results.

On top of that, TIGTA analyzed 103 randomly sampled ASFR cases and found that 9 percent of ASFR inventory could be eliminated if the IRS had considered previously filed tax returns and other information during the selection process.

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“The IRS needs to bring noncompliant taxpayers into compliance to ensure fairness and reduce the burden on the vast majority of taxpayers who fully pay their taxes on time,” said TIGTA Inspector General J. Russell George in a statement. “An effective Automated Substitute for Return Program is an important part of its efforts to bring those who do not file tax returns into compliance.”

Treasury Inspector General J. Russell George addressing a House subcommittee
Treasury Inspector General J. Russell George addressing a House subcommittee
Bloomberg News
TIGTA made seven recommendations in the report. The IRS intends to take corrective actions on five of them, but disagreed with two of the recommendations. In one instance, IRS management didn’t agree to reassess the suspension of the ASFR program due to limited resources, and in the other instance, disagreed with extending the refund hold period due to its view that the hold period is sufficient when the ASFR Program is operating as intended.

“The Automated Substitute for Return (AFSR) program is a component of our collection strategy to promote filing compliance,” wrote Mary Beth Murphy, commissioner of the IRS’s Small Business/Self-Employed Division, in response to the report. “Attempting to bring noncompliant taxpayers into compliance ensures fairness and reduces the burden on taxpayers who fully pay their taxes on time. Resource constraints have forced us to make difficult decisions with respect to some of our programs, even those that provide clear benefits to tax administration. Because a nonfiler strategy is important to our mission, we are currently working to develop one that fits within the current and future IRS operating environment, requiring fewer human resources, while providing an opportunity for us to achieve our desired outcomes.”

Michael Cohn

10/17/2017

IRS scales back program to go after people who don’t file taxes

By Michael Cohn
Published October 16 2017, 3:12pm EDT
More in Tax evasion Tax avoidance J. Russell George IRS TIGTA

The Internal Revenue Service has needed to significantly cut back a program that automatically followed up with people who failed to file a tax return, due to budget constraints, according to a new report.

The report, from the Treasury Inspector General for Tax Administration, blamed resource constraints for the IRS’s curtailment of the Automated Substitute for Return Program, even though it recently brought in billions of dollars a year. From June 2010 through July 2011, the ASFR program collected over $3 billion, but from June 2015 to July 2016 collections plunged to approximately $430 million after it was scaled back.

When a taxpayer who has a tax filing requirement fails to file a tax return, the IRS is allowed to use third-party information to determine a tax liability and assess it. The IRS handles these cases mostly through the ASFR Program, which enforces filing compliance against taxpayers who haven’t filed individual income tax returns but seem to owe a lot of money in taxes. The IRS has mainly used the ASFR Program to focus on “Refund Hold” cases where the IRS holds a refund on one tax year to get an unfiled return for another year. According to the report, if the IRS refocused its priorities away from small Refund Hold cases and instead focused on high net tax due cases, the IRS could collect $843 million over the next five years. The report also contends that if the IRS worked on Refund Hold cases differently, it could have collected $45 million in unpaid taxes by applying tax refunds to amounts owed from prior years in which no tax return was filed.

Refund Hold inventory includes income tax refunds withheld from taxpayers to cover any potential tax liability on an unfiled tax return. Refund Hold cases are considered the highest priority work for the ASFR Program because refunds are held for only six months. High net tax due cases in the ASFR Program are those in which the potential tax liability from an unfiled return is $100,000 or more.

TIGTA’s analysis of 21,533 of the Refund Hold cases worked on under the ASFR Program between June 2011 and November 2016 identified 12,872 cases (or about 60 percent) that were not resolved within six months, and a refund was released to the taxpayer in 8,115 cases. The report noted that if the IRS held these refunds until the ASFR process was completed, it could have potentially applied $45 million to the taxpayers’ accounts.

However, TIGTA also estimates that if the IRS had worked on the same number of high net tax due cases it closed in the period July 2010 through June 2011 in the most current period of July 2015 through June 2016, it would have potentially increased revenue by about $169 million dollars, which is approximately $843 million over the next five years. Replacing 9 percent of the Refund Hold cases the ASFR Program closed during FY 2016 with high net tax due cases would achieve these results.

On top of that, TIGTA analyzed 103 randomly sampled ASFR cases and found that 9 percent of ASFR inventory could be eliminated if the IRS had considered previously filed tax returns and other information during the selection process.

“The IRS needs to bring noncompliant taxpayers into compliance to ensure fairness and reduce the burden on the vast majority of taxpayers who fully pay their taxes on time,” said TIGTA Inspector General J. Russell George in a statement. “An effective Automated Substitute for Return Program is an important part of its efforts to bring those who do not file tax returns into compliance.”

Treasury Inspector General J. Russell George addressing a House subcommittee

Treasury Inspector General J. Russell George addressing a House subcommittee

TIGTA made seven recommendations in the report. The IRS intends to take corrective actions on five of them, but disagreed with two of the recommendations. In one instance, IRS management didn’t agree to reassess the suspension of the ASFR program due to limited resources, and in the other instance, disagreed with extending the refund hold period due to its view that the hold period is sufficient when the ASFR Program is operating as intended.

“The Automated Substitute for Return (AFSR) program is a component of our collection strategy to promote filing compliance,” wrote Mary Beth Murphy, commissioner of the IRS’s Small Business/Self-Employed Division, in response to the report. “Attempting to bring noncompliant taxpayers into compliance ensures fairness and reduces the burden on taxpayers who fully pay their taxes on time. Resource constraints have forced us to make difficult decisions with respect to some of our programs, even those that provide clear benefits to tax administration. Because a nonfiler strategy is important to our mission, we are currently working to develop one that fits within the current and future IRS operating environment, requiring fewer human resources, while providing an opportunity for us to achieve our desired outcomes.”

Michael Cohn

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