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    Subject Term: "Tax nonpayment"

    3 publications with a total of 6 open recommendations
    Director: White, James R
    Phone: (202)512-5594

    2 open recommendations
    Recommendation: To understand the scope of the business nonfiler population, the Commissioner of Internal Revenue should estimate the magnitude of business nonfiling among businesses registered with IRS, using data from its operational files to select cases for further investigation. Based on the results of this work IRS should develop a tax gap estimate for the impact of business nonfiling insofar as doing so is cost-effective.

    Agency: Department of the Treasury: Internal Revenue Service
    Status: Open

    Comments: As of August 2017, IRS said it did not plan to develop a partial estimate of the business nonfiler rate, as we recommended in August 2010. IRS reported that funding would likely be unavailable for it to do so using operational data. According to IRS, its existing operational data on business nonfilers are sufficient. However, even a partial estimate could give IRS additional information that would be useful in its strategic planning and help it determine what priority it should place on this type of noncompliance.
    Recommendation: To monitor the performance of business nonfiler activities, the Commissioner of Internal Revenue should set a deadline for developing data that can be used to measure the performance of the BMF CCNIP and its business nonfiler compliance activities overall.

    Agency: Department of the Treasury: Internal Revenue Service
    Status: Open

    Comments: IRS has determined that it does not have the necessary data that could be used to measure its business nonfiler efforts across the agency and that it therefore cannot set a deadline for developing such data, as GAO recommended in August 2010. According to IRS, developing such data would be prohibitively costly. Rather, as of August 2017, IRS plans to continue to use the data at the operating division level. Without going through the process of developing performance data, IRS is unable to know what data would aid in monitoring and evaluating its business nonfiler efforts. Absent cross-agency performance data, IRS is unable to fully understand the outcomes of its business nonfiler efforts.
    Director: White, James R
    Phone: (202)512-5594

    3 open recommendations
    Recommendation: To simplify the burden that the corporate exemption places on payers to distinguish payees' business status and also provide greater information reporting, Congress may wish to consider requiring payers to report payments to corporations on the form 1099 MISC, as we previously suggested and as proposed in the Bush Administration's budget.

    Agency: Congress
    Status: Open

    Comments: No legislative action has been identified to require payers engaged in a trade or business to report on payments to corporations for services, thereby reducing these payers' burden to determine which payments require reporting. On March 23, 2010, Congress enacted section 9006 of the Patient Protection and Affordable Care Act of 2010 (Public Law 111-148), which expanded information reporting to include payments made to corporations, consistent with GAO's January 2009 matter for congressional consideration. The provision also required payers to report payments for property and gross proceeds. The provision was to be effective for payments after December 31, 2011, requiring payers to report beginning in January 2013 on payments to corporations made in 2012 for property or services. However, Congress repealed the provision on April 14, 2011, by section 2 of the Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act of 2011 (Public Law 112-9).
    Recommendation: To gauge the extent of 1099-MISC payer noncompliance and its contribution to the tax gap, the Commissioner of Internal Revenue should, as part of future research studies, develop an estimate of 1099-MISC payer noncompliance.

    Agency: Department of the Treasury: Internal Revenue Service
    Status: Open

    Comments: According to IRS, developing such an estimate requires a multi-pronged approach and a large amount of coordinated effort. One prong is to determine the extent of filing compliance among employers. A second prong would determine the extent to which 1099-MISC payers properly report their payments. Starting with the Tax Year 2001 individual income tax reporting compliance study, the National Research Program (NRP) office has been collecting some data related to Form 1099-MISC compliance, from both the payer and payee perspectives. With the ongoing annual individual income tax reporting compliance studies, the IRS will gather more data on this issue. However, by themselves, these efforts will not provide a comprehensive picture of the scope of potential Form 1099-MISC non-compliance. Additional data will be generated by the NRP reporting compliance study for employment tax. As part of the NRP employment tax research, IRS examiners were to review taxpayers' Form 1099 filing compliance. Data collected from these studies should shed some light on whether employers are appropriately reporting required payments on Form 1099-MISC. As of July 2017, IRS had completed portions of its analysis of the NRP employment tax sample results and was working to resolve data issues. IRS estimates its analysis of the extent of Form 1099-MISC payer noncompliance will be complete by December 2017. We will continue to monitor IRS's progress.
    Recommendation: To gauge the extent of 1099-MISC payer noncompliance and its contribution to the tax gap, the Commissioner of Internal Revenue should, as part of future research studies, determine the nature and characteristics of those payers that do not comply with 1099-MISC reporting requirements so that this information can be factored into an IRS-wide strategy for increasing 1099-MISC payer compliance.

    Agency: Department of the Treasury: Internal Revenue Service
    Status: Open

    Comments: IRS researchers are collecting data on 1099-MISC reporting as part of its National Research Program (NRP) study on employment taxes, a program that involves examinations of a sample of tax returns expected to culminate in 2015. The examinations include tax years 2008 through 2010. As part of the NRP employment tax research, IRS examiners were to review taxpayers' Form 1099 filing compliance. Collecting data on this issue will enable IRS to study the nature and characteristics of payers that do not comply with 1099-MISC reporting requirements. As of July 2017, IRS had completed portions of its analysis of the NRP employment tax sample results and was working to resolve data issues. IRS estimates its 1099-MISC payer reporting compliance analysis will be completed in December 2017.We will continue to monitor IRS's progress.
    Director: White, James R
    Phone: (202)512-3000

    1 open recommendations
    Recommendation: To provide clarity for which taxpayers with rental real estate activity must report expense payments on information returns and to provide greater information reporting, Congress may wish to consider amending the Internal Revenue Code to make all taxpayers with rental real estate activity subject to the same information reporting requirements as other taxpayers operating a trade or business.

    Agency: Congress
    Status: Open

    Comments: As of March 2017, no legislation had been identified to make owners of rental real estate subject to the same payment reporting requirements regardless of whether they engaged in a trade or business under current law. In the 112th Congress, Congress enacted the Small Business Jobs Act of 2010 (Public Law 111-240), which contained a provision that required, in general, persons receiving rental income from real estate to be considered engaged in a trade or business and therefore subject to the reporting requirements of section 6041 of the Internal Revenue Code, which was consistent with GAO's August 2008 matter for congressional consideration. However, Congress repealed the provision on April 14, 2011, by section 3 of the Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act of 2011 (Public Law 112-9).