Employment Tax Audits to rise

The Internal Revenue Service recently announced that, under its National Research Program (NRP), it is developing a program that will conduct detailed employment tax examinations. The NRP was introduced in 2002. NRP audits are normally more complex and in depth than regular audits as the IRS attempts to extract information from its sample population to determine taxpayer trends.
 
The employment tax NRP is expected to involve 2,000 tax examinations during each of the next three years.

The audit samples will be assigned at random, meaning just because you have been chosen does not mean there is an error. The IRS has already begun to notify taxpayers that will be under audit.

The focus area of these audits will include the following:

(1) Worker classification (employee vs. independent contractor);
(2) Fringe benefits
(3) Officer's compensation
(4) Reimbursed expenses

If you have any questions, please contact Feeley & Driscoll's Boston CPAs, Email us or call 1 (888) 875-9770. Let us know if any taxing authority has contacted you or has requested information as we may be able to help or mitigate in certain situations.

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