Tax Compliance Consulting and Support Solutions
Managed Regulatory Services
IRS Compliance offers a multitude of Managed Services to the filing community. Whether your company needs to outsource the entire process of processing & reporting payee TIN Management, W-9 & W-8 series solicitation, TIN Matching, Filing, Printing, B-Notices & TIN Penalty Notices year round (SaaS) or your needs are centered around the management of certifying payees & withholding or you just need assistance with year-end processes, IRS Compliance Managed Services can meet those needs.
The benefits of IRSC administration & expert services are immediate: by reducing the surge for resources such as valuable Tax, Accounts Payable & IT personnel by eliminating the need for data processing dependency, your company can shift dedicated resources to business-specific issues while relying on regulatory experts, improving compliance & reducing costs.
IRS Compliance (IRSC) offers a multitude of Managed Services to the business community. Whether your company needs to outsource the entire process of processing & reporting payments to the IRS and State tax agencies, payee TIN Management, W-9 & W-8 series solicitation, TIN Matching, Filing, Printing, B-Notices & TIN Penalty Notices year round (SaaS) or you just need assistance with year-end processes, IRS Compliance Managed Services can meet those needs.
The benefits of IRSC administration & expert services are immediate: by reducing the surge at year-end for valuable resources such as Tax, Accounts Payable & IT personnel and by reducing the need for data processing dependency, your company can shift dedicated resources to business-specific issues while relying on regulatory experts, improved compliance & reduced costs.
Managed Services provides the filing community with a comprehensive, Managed Service Solution for 1099/1098/5498/1042-S/W-2 information processing and reporting. This service maintains your unique business profile; payee and payment database of reportable transactions and provides access to the user’s from their desktops through a secure web based internet or intranet connection.
IRS Compliance has been providing secure hosted 1099, 1042-S, and W-2 compliance reporting services for more than 25 years.
IRSC Managed Services will improve your federal and state compliance for information reporting and withholding – while reducing the burden, penalty risks, and costs associated with maintaining a compliant organization.
The IRSC Managed Services solution supports current and multiple prior years of tax data to track payments and report 1098, 1099, 5498, W-2G, W-2, 1042-S series and Puerto Rico information returns to all federal and state agencies. This includes payee and payment information tracking, payee TIN management, B-Notice and TIN Penalty processing, recipient statements and the creation and transmittals of federal and state returns. With easy to use, point and click functionality, users can access their secure payee and payment information directly from their laptops or desktop PC’s.
This service provides your users with secure access from any location. Access to payee and payment data is literally a click away for adding new payees and accounts, inquiry, and updating. Users can choose to perform standard or customized data queries, request reports, and payee statements to be produced and printed on demand to your internal desktop or local printers.
By relying on IRSC Managed Services, your company can be confident that payments issued by your business areas are being monitored for their reportable status, processed and tracked throughout the year. Additionally those payments are balanced, reconciled, and filed as required by federal and state agencies by regulatory experts. Our regulatory services group is comprised of tax compliance professionals, previously with the IRS, worldwide tax firms and Fortune 100 companies – all with long standing and proven expert experience in regulatory tax law and tax services.
Service options can also be tailored to each client’s needs within the realm of payment tracking and information reporting. The Regulatory Services Team will coordinate with the client and its departments to setup and execute the tasks year-round so that compliance with regulations are met.
Contact us at (410) 914-5470 or email us at [email protected] to find out how we can improve your compliance with the requirements, processing, filing & client support throughout this upcoming tax filing season.”
The IRS is focused on the effort to enforce current requirements and expand information reporting and mandatory withholding regulations, significantly broadening the application of tax law. Full information reporting audits are now being conducted which will include all 1099, 1098, W-2G and 1042-S forms / payment transactions.
New regulations significantly impact filers beginning this year-end and continue in the years to come.
New legislation passed into law:
- Payers are required to report services payments made to corporations – tax year 2012 – currently up for repeal
- Payers are required to report payments issued to any entity for goods and services. – currently up for repeal
- Increased Penalty Structure – Significant increases to assessed penalties – double or more and raising the cap from $250,000 up to $1,500,000. Any returns filed January 1, 2011 and after are subject to the increased penalties.
- TIPRA 2005 – All government agencies (with annual overall budgets of $100 million) will be required to withhold 3% federal tax on all payments for goods (materials) and services, for any payments issued after December 31, 2011 (TIPRA 2005). This law applies to all federal, state and local agencies.
- IRC 6050W – Information returns, TIN Certification and Backup Withholding for merchant card reimbursements. Requires institutions that reimburse merchants in settlement of reportable card transactions beginning January 1, 2011 to file information returns with the Internal Revenue Service showing the grand total of reimbursements issued for transactions related to goods and services. The entity reimbursing the merchant for such transaction is responsible to obtain the correct Tax ID and Name of the Merchant and apply backup withholding of 28% federal tax to those merchants who fail to provide the correct information.
Any organization that intentionally does not comply with the requirements to properly document U.S. or foreign payees, implement withholding when required or report could face criminal proceedings. In a criminal case, the officers of the company can be held personally financially liable for the findings of the court. (a) General rule Any person required to collect, truthfully account for, and pay over any tax imposed by this title who willfully fails to collect such tax, or truthfully account for and pay over such tax, or willfully attempts in any manner to evade or defeat any such tax or the payment thereof, shall, in addition to other penalties provided by law, be liable to a penalty equal to the total amount of the tax evaded, or not collected, or not accounted for and paid over. No penalty shall be imposed under section 6653 or part II of subchapter A of chapter 68 for any offense to which this section is applicable.
- If you are certain that the payee is a U.S. person and the payee has not provided the required information and/or certification – withhold 28% federal tax and any applicable state tax. If you have any reason to believe that the payee is a foreign individual or entity and the payee has not provided the required Form W-8 which includes a US generated TIN – you must withhold 30% federal tax and any applicable state withholding tax.
- When issuing payments to a foreign payee – there is almost always a requirement to withhold some percentage of tax.
- If the payee provides the Form W-8 and it is completed correctly, you are then required to comply with the tax country’s withholding treaty (if there is a treaty with the U.S.), which could be a lower percentage than the 30% rate.
- For countries that do not have a treaty with the United States – you must withhold 30%, even if the payee provides a correct and complete Form W-8.
- If the payee provides a Form W-8 and it is not completed with all of the correct information such as exemption codes and/or does not provide a U.S. TIN or ITIN treaty rates and exemptions do not apply – you must withhold 30%.
- Form W-8’s may expire every 3 years and you are required to be re-solicited.
- For payments for services, an individual foreign payee may fill out additional documentation, exempting them from withholding.
- When issuing U.S. Source income payments to a payee who has a foreign residence address, the payer is required to determine via documented certification whether the payee is a foreign person or a U.S. resident living abroad. For U.S. citizens living abroad, re-certification is required and withholding on payments may be required.
- Keep in mind that unlike reporting and withholding for U.S. Payees and Corporations, all entities are subject to reporting and withholding if foreign.
Organizations must ensure that any area within the organization issuing payments, keep informed of regulatory changes and apply the proper procedures to account openings, obtaining the required documents containing the TIN/Name/Status information and initiate withholding when required prior to any payment being issued.
- If the payee is U.S. and completes the Form W-9 giving a status of corporation, the name of the payee should contain Corporation, Incorporated, INC., etc. LLC’s (in most cases) , LLP’s, Partnerships, etc. are not corporations and must be reported according to the regulations pertaining to the type of payment.
- Payments issued to corporations for medical, legal services and gross proceeds paid to an attorney are required to be reported.
- Each Payer (FEIN) is required to comply with TIN certification and withholding requirements Any change in status, even an address change of country requires new solicitation of any U.S. or foreign payee.
- Several types of payments are not included on the B-Notice (CP2100 or CP2100A) but may be included on the TIN Penalty (972CG). In the event that a payment issued to a payee is present on the Penalty Notice Letter but did not appear on the B-Notice, it is recommended that the payer sends a letter and Form W-9 to the payee and requires the payee to properly fill out and comply with a re-certification request.
IRS Compliance can assist your organization with this process by soliciting certifications, TIN Matching and the management of responses to all or new vendors/payees. IRSCompliance can track all activity that occurs with your payees and mange the B-Notice and TIN Penalty processing as well. This process will provide you with reasonable assurance that you have obtained the correct TIN/Name combinations from your W-8 / W-9 forms and/or begun the process of withholding or payment suspension.
Current regulatory law requires any U.S. organization issuing U.S. Source income payments to properly obtain the tax identification number (TIN) and legally related name from each payee along with their tax status – individual, corporation, LLC, LLP, partnership, or other designation. In many cases, depending on the type of payment, the payer is required to obtain a certified copy of Form W9 from a U.S. Payee or a Form W-8 from a foreign payee.
Failure to obtain the TIN, legal name and status places the payer in the position of being required to withhold federal tax and possibly state tax from each payment. This withholding must continue until the payer receives the required information and proper documentation, as required (Form W-9, Form W-8).
Many organizations issuing such payments should understand that failure to initiate the required withholding transfers the financial liability for the amount of withholding to the company. Therefore, a payer who fails to obtain the proper TIN and name certification and fails to withhold can incur penalties for failure to withhold, timely deposit of the tax withheld and the correct amount of the tax required to be withheld.
If your company finds itself in the position where a payee has not provided the TIN, name and status when requested or has not completed the required documentation (Form W-9/Form W-8) – a determination of U.S. or foreign status must be made based on the knowledge of the payee’s information.
IRS Compliance assists and supports client’s TIN Management requirements throughout the year.
IRS Compliance offers solicitation and certification services to obtain, certify and validate payee documentation on behalf of your organization, & can be customized to meet your needs.
- W-8 and W-9 solicitation
- Documentation, Recording & Validation for US & Foreign Payees
- Documentation of payee’s failure to respond to notices/solicitations
- Generation of a cover letter to explain to the payee the need for their response with the certificate
- The letter would also explain the resulting withholding of tax for any future payments should they not respond with the required valid information. The mailing would also include the forms to be completed
- The mailing may include the IRSC address for response and the IRSC phone number for them to call with questions regarding the request for certification
- IRS Compliance would field calls with regulatory questions
- From the responses received, IRSC will review all documents for validity
- Any documents validated will be TIN Matched against the IRS database to check for validity wherever permitted by the IRS
- The responses determined to be invalid will be followed up and re-solicited or contacted with the second request
Has your company received an IRS 972CG (TIN Penalty Assessment) Letter?
This notice is the IRS response to your company regarding the Information Returns filed for the prior tax year. In this notice, Penalties are assessed for returns filed with missing or incorrect Tax Id’s (TIN’s) and Names, returns filed late and returns filed on incorrect media. But before you pay this penalty, take the necessary action to attempt to abate the penalty. Do not build a history of non-compliance with the IRS.
The IRS TIN Penalty Assessment now include Form 1042-S (payments issued to foreign payees), Form 5498 and Forms W-2 – errors which could increase your risks for penalties and withholding liabilities.
If you are interested in obtaining assistance or services in order to address the abatement so as to respond to this notice properly & eliminate or reduce the assessed penalty, contact us. We can help through our Regulatory Consulting Services or any of our Managed Services to assist your company’s compliance with Federal and State regulatory requirements.
IRS Compliance publishes Periodic Regulatory Bulletins that can keep you informed on new and proposed Federal and State Regulations, current reporting and withholding requirements, IRS audit and enforcement initiatives and best practices regarding 1099, 1042-S and W-2 payments, withholding and information reporting.
Staying abreast of the numerous efforts of the IRS, and state revenue agencies to modify existing or implement new regulatory requirements that impacts withholding and reporting of payments issued to U.S. and foreign payees is very burdensome and resource intensive.
Applying those requirements to internal procedures and processing can present challenges to comply and a need for answers. Our Regulatory Support and Bulletin Service provides you with year round current information on these initiatives and passed legislation, timely notices of requirements, best practices and a resource to contact for questions.
For one flat fee annually, you can subscribe to this valuable service and benefit from consistent updates on current, new and proposed initiatives and the impact those regulations may have on your procedures and practices. Being informed and prepared to comply timely to regulatory requirements reduces the possibility for financial risk associated with penalties and liability for withholdings.
IRS Compliance staff has extensive experience with federal and state regulatory law and the application of necessary procedures to comply. Our staff is comprised of experts formerly with the IRS, Big 4 accounting firms and the Tax Directors from the banking, insurance and services industry.
- Notices on proposed withholding and reporting requirements for federal and state agencies regarding in state and out of state withholding and information reporting.
- Impact on business practices to comply with proposed federal and state regulations
- U.S. and Foreign Payee Documentation and Certification requirements and Procedures
- U.S and Foreign Withholding
- IRS Audit Initiatives
- IRS TIN Matching
- Best practices to comply with Federal and State requirements
- Updates on New Legislative Requirements
- Timely Regulatory Calendar Reminders
- Commentary Articles on Hot Issues
- Year Round telephone and email regulatory support
Regulatory Consulting
Even some of the best-managed companies can find themselves liable for millions of dollars in Penalties and Backup Withholding costs. Ever changing Federal and State Regulations regarding withholding and reporting regulations consistently exposes your company to penalties, interest and withholding liabilities for failure to comply. New regulations apply to specific segments of the business community and government agencies with complex and burdensome requirements. Now is the time to examine your risks for past noncompliance, cure those risks and prepare your company to comply with current and new regulations. IRS Compliance can assist with a comprehensive Risk Assessment, curing failures and implementing compliant policies and procedures to ensure ongoing compliance.
- Incorporated FACTA Policies & Procedures?
- Are your business areas FATCA Compliant?
- Ever filed annual Information Returns late with any tax authority?
- Failed to file the proper state and local quarterly returns?
- Received “B” Notices from IRS?
- Failed to perform re solicitation in a timely manner?
- Failed to begin backup withholding in a timely manner?
- Received IRS 972CG Notices?
If you answered yes to any of these questions, you may have significant tax risk exposure.
You can protect your company by being proactive. Waiting for the IRS or a state to raise the issue could be extremely costly.
Our goal at IRS Compliance is to help you avoid an audit, or at least be in a position to control the audit if selected.
► REVIEW OF COMPANY OPERATIONS
- Determine types of information reporting required.
- Review current policies and procedures
- Review your vendor/payee TIN Solicitation process.
- Review your TIN Matching process.
- Review your “B” Notice process.
- Review your TIN re-solicitation process.
- Review your backup withholding practice.
- Review your IRS 972CG Penalty Notice process.
- Identify previous penalties paid and determine if they may be recoverable.
► VOLUNTARY COMPLIANCE
- By employing our extensive knowledge of protocol and procedures, we clean up your company’s compliance history with IRS and/or state tax authorities.
► POLICY & PROCEDURES
- Application of best practices from our experience for policies and procedures in all industries
► AUDIT DEFENSE & MANAGEMENT
- Negotiate with IRS and states to resolve audits or past due filing requirements.
► COMPLIANCE REPORTING & PROCESSING
- Perform due diligence
- Prepare and submit Information Reporting Documents and reports to IRS and states accurately and timely
The IRS has stepped up the number of audits currently being conducting and their effort to audit 100% of all organizations issuing payments to U.S. and foreign payees. With the onset of the new FATCA (Foreign Account Tax Compliance Act) regulations, on boarding payees properly(both U.S. and foreign), determining the correct federal and tax withholding and filing information returns has become more complex, which can lead to greater financial risk for non-compliance.
In the course of ensuring that U.S. payers comply with regulatory law and with the current economic conditions, the U.S. Treasury, IRS and Congress are challenged to enforce the current regulations; impose liabilities for failure to withhold tax, and all penalties and interest associated with failure to comply with the tax regulations that apply when issuing payments to U.S and foreign payees. Additionally, Congress continues to cope with the need for new or changes in regulatory requirements, which result in ever changing requirements.
Under an IRS audit, & even some state audits, the auditor will ask to review your corporate and departmental policies and procedures when issuing payments for; documenting payees, withholdings, deposits, reporting and controls.
Corporate policies and procedures are required to establish the company’s position on compliance with the regulations and internal enforcement. Departmental policies and procedures address the steps and functions that will ensure that anytime an account is opened or a payment made, that procedures are adhered to for obtaining payee TIN/EIN information, federal and state withholding is applied (if required), and that original and corrected returns have been properly filed.
As part of an information reporting audit or a compliance check, the IRS may ask to examine corporate and departmental policies and take a close look at the procedures that are followed in the process of establishing a payee/vendor account, issuing payment, withholding, reporting and ongoing tracking of payee withholding status. The IRS may examine the software or methods utilized by your company for regulatory processes and can request historical data on any of the payees and payments, payee documentation and withholding deposit history.
Establishing and enforcing up-to-date policies and procedures for any area in your company that may issue payments is critical to avoid costly penalties and liability! As part of an IRS audit, policies and procedures will be reviewed for compliance and enforcement.
IRS Compliance can assist in developing the necessary policies and procedures for both the corporate and business areas and assist in their implementation.
Now is the time to examine your current processes and determine what procedures or changes your company needs to ensure that all business areas adhere to compliant guidelines when opening accounts and issuing payments. Improve your procedures and reduce your risks during an audit.
IRS Compliance assists organizations striving to identify and “cure” errors and / or omissions in past processing and filing of information returns to the IRS & the states.
If your business has become aware that certain payments were not reported properly or not reported at all, payees were not certified correctly or the information reported previously was not correct – we can assist in attempting to resolve these past or present issues by identifying the risk area and taking steps to remedy the error – prior to that IRS or state(s) issues a penalty or an audit.
Errors may have been discovered by your own organization, by IRS Compliance via a Risk Assessment or even a request for information issued by the IRS or state. In order to reduce or eliminate that possible liability – we can attempt to clearly identify the failure and remedy it if at all possible.
Year End & Custom Services
- Federal and State Information Returns for Originals and Corrections
- Annual IRS and SSA returns for Form 1099, 1098, 5498, W-2, 1042-S, Puerto Rico and other U.S. Territories
- Quarterly Wage Reporting
- Independent Contractor Reporting
- Electronic submission of payee Forms W-8 and W-9, validation and remediation
- Printing and Mailing of all required notices and statements
- Balancing and reconciliation
- FATCA Compliance
- IRS TIN Matching and Documentation
- P-Card transaction Processing and Reporting – Form 1099-K
- Withholding Deposit Services Available
- Access to Regulatory Publications, Newsletters, webinars and educational events
- Regulatory Consulting & Risk Assessment Services
- Regulatory Training
- Transmitter services
- TIN Compliance Management of:
- Withholding status and liability information management
- Form W-8, W-9 solicitations and certifications – paper and electronic
- B-Notice and TIN Penalty Letter processing
- TIN Certification validation and remediation
If your regulatory needs are limited to just year-end filing and statement services or a special mailing such as Forms W-9 and W-8 solicitations, IRS Compliance can help. We can file your returns with the IRS, SSA and the states on your behalf. Processing and filing services includes an IRS Bulk TIN Match, results of the match, editing your data, balancing and reconciliation of imported data, errors detected and the printing and mailing of the recipient statements.
IRS Compliance offers seamless periodic IRS TIN Matching services to the business community. Periodic TIN Matching is the best preventative measure against receiving IRS TIN and Name mismatch penalties, as it quickly identifies any customer/vendor that could result in a filing error and the subsequent penalty. Receiving the match results affords your company time to research the problem with the TIN and Name information for clerical errors when entered and/or time to re-solicit the payee for a new Form W-9 ahead of the time crunch at year end.
Submitting your payee information to us is a quick and easy file format and after performing the match – we provides you the results of that process. Keep in mind that when you onboard the payee and even perform a TIN Match payee names, tax identifications, and tax status (individual, DBA, corporations) can change without notice and payee records that were previously matched may no longer be correct. Establish due diligence against penalties and ensure that you payee TIN and Names are correct.
IRS Bulk TIN Matching your entire customer file frequently is the best measure to ensure accuracy.
Now is the time to verify that the Name and Tax ID information that you have on file for your payees is correct and if it is identified as incorrect, you are then in a position that to attempt to re-certify those payees prior to submitting your annual reporting, thereby avoiding B-Notices and Penalty Assessments on the records in error.
IRS Compliance can also provide additional services in the realm of TIN Management as an ongoing service to solicit Forms W-9 and W-8, validate the certifications, continually match certifications provided and maintain the withholding status of each payee. This extended service may also include B-Notice processing and TIN Penalty processing and tracking and abatement assistance.
So whether your need is just IRS Bulk TIN Matching or a year round service for managing payee TIN’s and withholding – IRS Compliance can help.
Managed Services are designed for customers who want the benefits of a strong tax compliance reporting solution and reducing cost and penalty risks. Organizations that move forward with Managed Services from IRS Compliance may choose to outsource all or part of the account and payee TIN management, processing, withholding deposits, filing and system maintenance requirements. The benefits of IRS Compliance administration and expert services are immediate. By reducing the excessive demand on resources such as valuable Tax, AP, and IT personnel and eliminating the need for data processing dependency, your organization can shift dedicated resources to business-specific issues while relying on regulatory experts, improving compliance and reducing costs.
Managed Services provides the filing community with a comprehensive, Managed Service Solution for 1099/1098/5498/1042-S/W-2 information processing and reporting. This service maintains your business profile; payee and payment database of reportable transactions and provides access to the user’s desktops through a secure web based internet connection.
IRS Compliance has been providing secure hosted 1099, 1042-S, and W-2 compliance reporting services for more than 18 years.
Managed Services will improve your federal and state compliance for information reporting and withholding – while reducing the burden, penalty risks, and costs associated with maintaining a compliant organization.
The Managed Services solution is supports current and multiple prior years of tax data to track payments and report 1098, 1099, 5498, W-2G, W-2, 1042-S series and Puerto Rico information returns to all federal and state agencies. This includes payee and payment information tracking, payee TIN management, B-Notice and TIN Penalty processing, recipient statements and the creation and transmittals of federal and state returns. With easy to use, point and click functionality, users can access the application (SaaS) and their secure payee and payment information directly from their laptops or desktop PC’s with internet access.
This service provides your users with secure access to the 1099, 1098, 5498, W-2, and 1042-S data from any location. Access to payee and payment data is literally a click away for adding new payees and accounts, inquiry, and updating. Users can choose to perform standard or customized data queries, request reports, and payee statements to be produced and printed on demand to your internal desktop or local printers.
By relying on Managed Services, your company can be confident that payments issued by your business areas are being monitored for the reportable status, processed and tracked throughout the year. Additionally those payments are balanced, reconciled, and filed as required by federal and state agencies, by regulatory experts. Our regulatory services group is comprised of tax compliance professionals, previously with the IRS, worldwide tax firms and Fortune 100 companies – all with long standing and proven expert experience in regulatory tax law and tax services.
Service options can be tailored to each client’s needs within the realm of payment tracking and information reporting. The Regulatory Services Team will coordinate with the client and its departments to setup and execute the file import processes for adding to or updating existing recipient payment data, filing federal and state information returns, processing and managing B-Notices and Penalty Notices, Form W-9 and W-8 solicitation, corrections, printing and mailing for recipient statements and more.
- Federal and State Information Returns for Originals and Corrections
- Annual IRS and SSA returns for Form 1099, 1098, 5498, W-2,
1042-S, Puerto Rico and other U.S. Territories - Quarterly Wage Reporting
- Independent Contractor Reporting
- Electronic submission of payee Forms W-8 and W-9, validation and remediation
- Printing and Mailing of all required notices and statements
- Data Imports from multiple divisions and business areas
- Balancing and reconciliation
- Management reports for balancing payments, reporting, and withholding
- Management of transaction detail history and audit trails
- Multi-Tax Year Retention and Reporting
- Consistent Regulatory Updates to System, Processes, and Procedures
- IRS TIN Matching and Documentation
- Call Center Support Available
- Withholding Deposit Services Available
- Access to Regulatory Publications, Newsletters, webinars and educational events available
- Regulatory Consulting & Risk Assessment Services Available
- Transmitter services
- Infinite Scalability – allows for processing of an infinite number of records for an infinite number of business areas and departments
- TIN Compliance Management of:
- Withholding status and liability information management
- Form W-8, W-9 solicitations and certifications – paper and electronic
- B-Notice and TIN Penalty Letter processing
- TIN Certification validation and remediation
- FATCA Compliance
Your company can rely on IRS Compliance to provide year round services and support that meet Federal and State regulatory requirements or if you just need a few of our Service Options – Managed Services is the solution.
Managed Services options include year round payee and payment data scrubbing, statements and Federal / State Reporting Forms 1099, 1042-S and W-2 processing, payment tracking, payee TIN management, B-Notice processing, penalty abatement assistance, IRS TIN matching, regulatory support and more.
Contact us now to find out how we can improve your compliance, processing, filing & client support throughout this upcoming tax filing season.