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For the second time in less than a year, members of Congress have sent a letter to the IRS imploring the agency to provide guidance on its policy for cryptocurrency taxation and related tax information reporting. This time, there is a deadline for the IRS to respond. Led by Minnesota Republican Tom Emmer, 21 members […]

Some organizations might have been surprised recently to receive a correction letter from the Social Security Administration (SSA) requesting corrected information on Form W-2 due to a name-social security number (SSN) mismatch. Although there is no penalty associated with the SSA letter, it could serve as a warning to help organizations stave off penalty notices […]

Tax Year 2018 brought important and likely unwelcome changes for organizations filing Forms 1099. At the same time the IRS eliminated the 30-day extension of time (EOT) for filing Forms W-2 and 1099-MISC reporting non-employee compensation, the agency also increased penalty amounts for late or incorrect filings. Accurate information and corrections on Forms 1099 is […]

In a recent presentation at the American Payroll Association’s Capital Summit in Washington D.C., IRS Director of Examination Operations and Specialty Tax Daniel Lauer announced upcoming changes to the way the IRS monitors and manages backup withholding in relation to Forms 1099. After reviewing feedback and anecdotal evidence from its income tax agents and tax […]

The demographics don’t lie: Reporting for form 1099-R is only going to grow more difficult as baby boomers retire. The form used to report distributions from IRA, pensions, annuities and other similar retirement accounts is poised to explode in volume. As such, financial institutions (FIs) and insurance companies can’t afford to mishandle 1099-R reporting. The […]

With the NCAA basketball tournament approaching, the US is gearing up for its biggest gambling weeks of the year. And while most “March Madness” pools might technically be illegal, legitimate sports betting is sweeping the US following last year’s landmark Supreme Court decision allowing states to legalize sports gambling in casinos.   As legal sports […]

The IRS recently published a notice reminding filers that, despite the repeal of the individual mandate of the Affordable Care Act (ACA) in last year’s tax reform bill, individuals must still indicate on their returns whether they had health coverage. The ACA remains the law of the land for Tax Year 2018, with individuals still required to […]

The Treasury Inspector General for Tax Administration (TIGTA) recently released a report making some significant recommendations to the IRS to improve taxpayer compliance in the gig economy. While the scope of the audit was intended to focus on compliance with self-employment taxes, the TIGTA quickly realized that the threshold and transaction limits for form 1099-K […]

It shouldn’t come as a surprise that the volume of returns received and processed by the IRS is down this filing season compared to last year. The question is why, and the answer likely has more to do with the government shutdown and new tax law than with filers missing deadlines. Although it is early […]

The rise of the so-called “gig economy” in the US has exploded in the last few years – last year, the Bureau of Labor & Statistics reported that 55 million people in the US are “gig workers” which represents about 35 percent of the US workforce — and it is supposed to rise to an […]

It is the “other” tax, the one that doesn’t generally get the attention that income tax gets. But use tax can be full of nasty surprises for financial institutions (FIs) that don’t have it under control. With jurisdictions cracking down with audits, developing processes to handle use tax is becoming a significant concern for financial […]

Note: Sovos attended a series of Insurance Accounting and Systems Association (IASA) events in 2018. What follows are some observations from speaking with attendees at those events. Like any other type of company, insurers are not immune to the complexities of 1099 reporting. The cumbersome chore, which most insurance companies tend to take on primarily […]

As global enterprises further their digital transformation initiatives to move financial applications to the cloud, many are at a crossroads with how they choose a deployment strategy that consolidates disparate financial and other departmental solutions and processes. Many organizations that consolidated under the auspice of a single enterprise resource planning (ERP) solution to combine administrative […]

With recent enforcement measures, the IRS has offered definitive proof that the Affordable Care Act (ACA) is still alive and that the agency plans to strictly enforce ACA reporting. Last spring, the agency issued Letter 226J to Applicable Large Employers (ALEs) that failed to cover 95 percent of employees. ALEs are companies with 50 or […]

UPDATE (Jan. 8): Reporting season is moving forward according to plan. The IRS has announced that it will process tax returns on schedule and without delays. While the agency will clarify its contingency plan in the coming days, organizations should proceed as planned with 1099 reporting and other seasonal filings. The IRS will recall a […]

2018 was a volatile year in indirect tax compliance for tax, finance and IT professionals worldwide. With an increase in globalization and tax gaps surpassing tens of billions in some countries, it’s not surprising that one of the biggest challenges governments are addressing is revenue collection. Like enterprises, governments are creating new, technology-driven processes to […]

Automatic Exchange of Information, or AEOI, has picked up serious momentum since 2015 and continues to grow, a new European Commission study shows. One important element in managing AEOI is assigning tax identification numbers (TINs), a trend that should grow as AEOI expands. AEOI involves the exchange of asset information among countries via a protocol […]

Affordable Care Act (ACA) reporting requirements for eligible employers remain in effect for Tax Year 2018 despite a ruling last week from a federal judge that held that the law is unconstitutional without penalties to enforce an individual mandate to purchase health insurance. With no injunction in place to shut down the law, the ACA […]