Posts Tagged "tax audit"

IRS audit plans revealed

Posted on May 25, 2010

The IRS has announced 2010 audit plans, which include audits in the following three areas:  * A three-year random audit program started by the IRS in 2007 will now be continued indefinitely. These random audits of individual income tax returns are used by the IRS to collect noncompliance data for adjusting general audit formulas and updating tax gap estimates.  * Another audit target: tax returns claiming the homebuyer tax credit. The IRS expects to open 200,000 audits by the end of 2010 to address potential fraud in claiming this credit. The Service will also be watching the recapture of the credit via public databases of real estate sales. Generally, those who sell a home within three years of taking the tax credit must pay it back.  * According to IRS Commissioner Douglas Shulman, the Service is planning to focus significant audit resources on individuals with millions of dollars in assets or income, including the business entities controlled by these high-income...

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Business Alert: IRS to conduct employment audits

Posted on Mar 9, 2010

The IRS is launching a three-year auditing project that will examine about 6,000 U.S. companies for compliance with employment tax obligations. The project is the first of its kind in 25 years, and its primary objective is to collect data to identify areas of noncompliance across all industry sizes and sectors, including nonprofits and governmental entities. Among the issues the audits will look at: * Classification of workers as employees or independent contractors, including executives rehired as consultants, dual status employees, and employee leasing arrangements. * Fringe benefits, including expense reimbursement arrangements and noncash benefits. * Executive compensation and fringe benefits, executive retirement contracts, golden parachutes, and stock options. The project will target 2,000 employers each year, with the first audit letters scheduled to go out this month or...

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