The most comprehensive resource available for payroll professionals. This service provides payroll news, white papers, custom research answers, webinars on the hottest payroll topics, survey and...
Problems that prevent the information-reporting process from working as effectively as it should were among the issues reported in the annual report to the Internal Revenue Service from the Information Reporting Program Advisory Committee.
The 2016 report, issued Oct. 26, also discussed penalties, Forms W-9 and frequently asked questions on the IRS website.
Added information reporting related to the Affordable Care Act, among other information requirements, created burdens for employers, the report said. The IRS, in response, said it could not pursue IRPAC recommendations to ease reporting rules because it lacks the resources to add projects to do so. “As a result, both taxpayers and the IRS suffer,” the report said.
The federal advisory panel recommended that the IRS correct problems that prevent employer requests to stop penalties for mismatched name and taxpayer ID numbers from being properly judged and quickly addressed. Until then, the panel recommended that the IRS suspend imposing further penalties for information returns showing mismatched names and IDs.
IRPAC views Form W-9, Employee's Withholding Allowance Certificate, as “one of the building blocks of the information-reporting process and recommends continued improvements that both simplify and bring clarity to the form.”
The IRS also needs to implement a process to archive past FAQs so that employers that rely on the guidance to file information returns can later show the basis for a position that has been taken, the report said. The report, as it did in 2015, recommended that the IRS explain reasons for changing or deleting previous FAQs.
Among other recommendations:
•Treasury regulations that now allow employers to electronically deliver Forms W-2, Wage and Tax Statement, and 1095-C, Employer-Provided Health Insurance Offer and Coverage Insurance, to employees should be amended to establish e-delivery as a default. Employees would retain the option to decline participation and receive paper forms. Employers now offering e-delivery must have each employee agree to participate to be relieved of printing and delivering a paper W-2 to the employee.
• The IRS should issue a tax tip that advises taxpayers to not request a correction to Forms 1095-C or 1095-B, Health Coverage, that had properly truncated Social Security numbers or date of birth reporting that was purposely not included.
•To help fight identity theft, the report recommended that federal employer identification numbers be truncated on information returns. The report said the IRS should expand its pilot program that adds verification codes to the W-2s. The program should be expanded to protect all businesses, the report said.
The IRS said it plans to further expand the program to other information reporting forms issued by all businesses. IRPAC said the federal IDs of the employer and the insurance company issuing coverage should be truncated on Forms 1095-B and 1095-C.To contact the reporter on this story: Michael Trimarchi in Washington at firstname.lastname@example.org. To contact the editor responsible for this story: Howard Perlman at email@example.com.
Copyright © 2016 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)