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Washington Alert – GAO report on IRS Collection; Webinar on Independent Contractors; US and Slovak Republic sign IGA; Tax Policy paper on the Cadillac tax

A recent report by the Government Accountability Office (GAO) focused on IRS’s collection process and found it heavily relies on the use of automation to categorize and route unpaid tax or unfiled tax return cases for potential selection. (GAO-15-647) The agency’s automated Inventory Delivery System (IDS) is used to categorize and route cases based on such factors as the type of tax and the amount owed. As described in the report, IRS’s collection program pursues individuals and businesses that failed to fully pay their taxes or file returns. Since 2009, the total tax debt inventory has increased 23% to $380 billion. During the same period, collection staff declined 23%. “Given its large workload and declining resources, it is important that IRS make informed decisions about the collection cases it pursues to enhance compliance and confidence in the tax system,” stated GAO. “In recent fiscal years, the collection program has exceeded nearly all case closure goals for priority cases,” GAO said. “However, because IRS has not identified objectives for the collection program, such as fairness, it is difficult to assess the program’s overall effectiveness,” it added. The report identified areas “where the absence of documented objectives and internal control deficiencies for categorizing and routing cases increase the risk that the collection program’s mission, including fair case selection, will not be achieved.” The report is available at gao.gov/assets/680/671733.pdf

IRS on Aug. 19 will rebroadcast a webinar titled “Payments to Independent Contractors” (e-News for Tax Professionals 2015-32) According to the agency, the webinar is geared towards tax practitioners, industry organizations and payroll professionals. Among the topics covered will be the following: Form 1099 filing requirements; backup withholding and how to avoid being liable for it; and CP2100 Notices for payee name/Taxpayer Identification Number mismatches. Participants can earn one Continuing Education credit under the federal tax category. For more details and to register, go to www.webcaster4.com/Webcast/Page/445/9522

The U.S. and the Slovak Republic on July 31 signed an intergovernmental agreement to improve international tax compliance and to implement the Foreign Account Tax Compliance Act (FATCA). The agreement can be found at treasury.gov/resource-center/tax-policy/treaties/Documents/FATCA-Agreement-Slovak%20Republic-7-31-2015.pdf

The Washington, D.C.-based Tax Policy Center recently published a paper which estimated the distributional impact of repealing the so-called “Cadillac tax” provided for in the Affordable Care Act (ACA). (Distributional Impact of Repealing the Excise Tax on High Cost Health Plans) As described in the paper, the ACA requires that employer-sponsored health benefits whose value exceeds certain thresholds be subjected to an excise tax starting in 2018. This has been dubbed the “Cadillac tax.” The Cadillac tax will apply to employer and employee contributions to health insurance premiums plus contributions to Health Saving Accounts, Health Reimbursement Arrangements, and Medical Flexible Spending Accounts. The paper is located at taxpolicycenter.org/UploadedPDF/2000315-Distributional-Impact-of-Repealing-the-Excise-Tax-on-High-Cost-Health-Plans.pdf

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Meet Paul Raymond

Meet Paul Raymond

Mr. Raymond is a sought after speaker in tax controversy law by many attorney, accountant, and business groups and at the request of the Internal Revenue Service, has presented programs at the IRS Nationwide Tax Forum, attended by tax professionals throughout the United States.

Additionally, he continues to be an active member in the Section of Taxation, American Bar Association, where he was the Past Chair of the Employment Taxes Committee.

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