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Article written By Bill Dadmun, Records and Receipts Manager, State of Virginia   How many of you use the aggregate function when reporting?  Does it make your life easier?  Listen to this scenario and tell me if it sounds familiar.   You get a call from someone that is due $49.95 from a credit balance.  […]

This isn’t the first time I’ve blogged about the dangers of reciprocal filing, but I feel like it is a topic worth covering again for those who may have missed it. Reciprocal or exchange filing means reporting records to a state even though the last known addresses for the records are not in that state. […]

Many of you know Illinois is now operating under new legislation. If you haven’t had a chance to review the legislation, you’ll want to do so before filing this year’s unclaimed property report. One change to take note of is the repeal of the general business-to-business exemption. Not only is the exemption no longer allowed, holders […]

With unemployment low and productivity high, the US economy appears to be steaming along. But one key metric suggests otherwise: the yield curve is inverted, historically a sign that a recession is on the way. A downturn in the economy could have a major impact on how the IRS enforces tax reporting compliance.  A yield […]

The IRS sent letters to more than 10,000 cryptocurrency holders last week, educating them about their income tax obligations associated with cryptocurrency transactions. The IRS also included information in that correspondence about applicable penalties for taxpayers who fail to report income and pay crypto taxes.  The agency sent three letters to taxpayers: Letter 6173 https://www.irs.gov/pub/notices/letter_6173.pdf […]

At the Nationwide Tax Forums in Chicago last week, the IRS communicated details about the first wave of backup withholding penalty notices that payers should expect to receive in September and October.  These new penalty notices are related to the enforcement campaign that kicked off from the IRS Cincinnati office in July. Background – Backup […]

Are unclaimed gift cards reportable as unclaimed property? It all depends. A recent ruling favoring the state of Delaware against an online retailer brought escheatment of unclaimed gift cards into the spotlight. Unclaimed property is escheated to the state of the property owner’s last known address, but challenges arise with gift cards due to lack […]

In a monumental moment for tax reporting professionals, the IRS has released a draft of Form 1099-NEC, the form that will eventually replace Form 1099-MISC box 7 for reporting nonemployee compensation and box 9 for reporting direct sales of $5,000 or more.  The NEC should alleviate confusion that resulted after the passage of the PATH […]

Despite IRS Commissioner Charles Rettig’s promise of “within the next 30 days” more than 30 days ago to Congress regarding the release of forthcoming cryptocurrency tax guidance, we have not seen anything materialize.  As we mentioned previously, the ongoing confusion related to tax reporting obligations continues to plague payers such as crypto or digital currency […]

At last, the IRS is allowing payers to truncate, or effectively mask, tax identification numbers (TINs) on Forms W-2 sent to payees. The decision comes after years of concern from companies and taxpayers about the risk of exposing TINs, or Social Security Numbers in the case of individual payees, in W-2 distributions.  The new policy […]

The IRS has released a draft version of the new 2020 Form W-4, Employee’s Withholding Allowance Certificate. It represents the most sweeping changes to this form since the Current Tax Payment Act of 1943 was passed, requiring employers to withhold taxes from employee payroll and remit them to the IRS on their behalf.  The form […]

When performing accounting functions, understanding how our actions will affect the company downstream is important. For some functions, the consequences are obvious, but for unclaimed property reporting, consequences of inaccurate reporting can be uncertain at best. Is it really a big deal if you are reporting everything to your company’s state of incorporation instead of […]

For the second time in the last month, the IRS has alluded to forthcoming guidance related to cryptocurrency and digital asset transactions.  IRS Commissioner Charles Rettig said in late May that clarification on crypto tax regulations might arrive by the end of June and gave further hints as to what might be included in the […]

It’s been quite a week at Sovos. Hours after announcing Sovos’ intent to acquire Foriba, expanding our geographic footprint into Turkey and bringing together the pioneers of e-invoicing compliance, we shared our plan to expand into new and existing markets in the U.S. with the acquisition of Eagle Technology Management (ETM). Eagle Technology Management (ETM) […]

The Treasury Inspector General for Tax Administration (TIGTA) reported results of a recent audit of the IRS internal controls in place to ensure that the withholding reported on information returns (i.e., Forms 1099) is accurately reflected on Form 945, Annual Return of Withheld Federal Income Tax, and that those amounts were paid to the IRS. […]

After four separate letters from members of Congress urging the agency to release clarification on cryptocurrency taxes, IRS Commissioner Charles Rettig finally responded to Representative Tom Emmer, R-Minn., on May 16, with confirmation that clarification is forthcoming. While Rettig’s letter did provide some specifics on what the guidance would cover, it did not include a […]

There has been a lot of attention paid to “gig” economy workers lately, and that includes some scrutiny by state and federal tax authorities. The growing impact to tax revenue as a result of under-reporting of income and minimal payments of self-employment taxes from this ‘new’ sector of American workers has not gone unnoticed. Academic […]

Background Generally, under Internal Revenue Code 3406(a)(1)(A), when a payer of US source income fails to collect a US tax identification number (TIN) in the manner required for the type of payment being made, 24 percent backup withholding is applicable at time of payment. Filers are required to remit those amounts to the IRS and […]