Tax Administration: State and Local Compliance With IRS' Information Reporting Requirements
GGD-89-63
Published: May 04, 1989. Publicly Released: May 22, 1989.
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Highlights
In response to a congressional request, GAO reviewed state and local governments' compliance with Internal Revenue Service (IRS) reporting requirements for payments made to independent contractors.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Internal Revenue Service | The Commissioner of Internal Revenue should establish an IRS focal point to provide assistance to those state and local government officials needing further clarification or elaboration on their reporting requirements. |
Closed – Implemented
IRS examination officials have established a focal point in IRS district offices for state and local government officials to get help.
|
| Internal Revenue Service | The Commissioner of Internal Revenue should encourage state and local audit agencies to routinely check the agencies they audit for information returns compliance. |
Closed – Implemented
IRS issued a revised state agency review plan that recommends regular, ongoing compliance check requirements in state audit procedures.
|
| Internal Revenue Service | The Commissioner of Internal Revenue should use the NASACT study of six states and the IRS reviews of California local governments to aid in the development of an IRS program for monitoring and enforcing state and local governments' information returns compliance. |
Closed – Implemented
IRS plans to visit and coordinate with state officers responsible for information return compliance and to selectively examine certain states to assess and improve compliance. IRS held Payor Compliance Information Returns training and conducted back-up withholding compliance checks in several states to improve and assess compliance in 1990 through fiscal year 1991.
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Topics
Contractor paymentsFederal formsstate relationsInformation disclosureLocal governmentsReporting requirementsState governmentsTax administrationTax returnsVoluntary compliance