This blog was last updated on December 11, 2023
There were numerous speakers, presentations and panel discussions on key issues impacting tax, regulatory reporting and compliance at the 2023 Sovos Comply & Connect: Reporting conference. The annual event took place in Austin, Texas from October 23-25. We’ve highlighted some of the hot topics that were covered.
Leveraging AI & robotics in tax reporting
Jessica Metts, director of client services, Comply Exchange and Brianna Bolin, director, compliance services, Sovos were two panelists discussing artificial intelligence (AI) and robotics in tax reporting. Joined by Nikole DiDio with Ernst & Young and Joe Oddi, data management consultant, Mass Mutal, the group covered how companies utilizing AI and robotics in the industry are primarily doing it for efficiency gains. Technology is not meant to replace people and is more meant to help people focus on more enjoyable and thought-provoking aspects of their job. State reporting, for example, no longer requires organizations to manually submit individual files to states, meaning businesses can instead focus on building relationships and trust with customers.
AI and robotics are also trainable, the panelists said. You can build logic and tasks for AI, but it’s also necessary to make corrections as you learn what isn’t working. Remember to trust but verify, especially as some organizations may be utilizing AI or robotics with their compliance requirements. While this is a good first step towards efficiency gains, it is important that businesses verify information. In some cases, regulatory experts found that AI tools were blending legislative cases together, where AI presented inaccurate case information and inaccurate regulatory requirements.
How to better engage the up-and-coming workforce
Vanessa Diaz, consulting manager, Accenture, provided a look into the evolving workforce. As Baby Boomers and Gen X grow older and continue to leave the workforce, Millennials and Gen Z are replacing them. With that, leaders need to rethink their relationship with people and society. These new workers are looking for transparent, supportive and socially responsible employers who take the time to make investments in them, Diaz explained. Leaders must maintain engagement throughout the employee life cycle, starting at the recruitment stage. This includes reviewing job descriptions to ensure the right candidates apply, sharing your company’s purpose, mission and growth potential during the interview process and establishing a positive connection. As employees develop within your company, a collaborative environment can help your workforce create clear goals and understand their metrics of success. Providing quality feedback with good mentoring is vital at this stage. Once the employees have developed, maintain transparency and keep them connected to the overall purpose and mission to create a sense of belonging.
Top ‘red flags’ that trigger IRS audits
Tara Ferris with Ernst & Young discussed how the IRS has been sending “love letters” if they notice any discrepancies in an organization’s 1042-S and 1099 reporting. Common pitfalls that could help trigger IRS audits include delinquent returns, deposit transfers, acting as a reporting agent, proof of deposit, and treaty challenges.
There are numerous ways to trigger an IRS audit, Ferris cautioned, but businesses can follow some best practices to help mitigate the risk. One way to prevent audits and IRS notices is by utilizing the IRS TIN matching program. This program is available to filers of Forms 1099-B, DIV, INT, MISC, NEC, OID and PATR.
Another best practice is to regularly request transcripts. There are two ways for a business entity to get transcripts, either having a tax practitioner get them on entity’s behalf or filing Form 4506-T and requesting the transcripts by mail.
Overall, the Comply & Connect Reporting conference was a great opportunity for industry experts to connect, network and present on key issues for tax, regulatory reporting and compliance. We want to thank all of our speakers and attendees who attended this annual event and look forward to seeing everyone again next year.
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