Federal Employment Tax Oversight: Preparing for Heightened IRS Enforcement

Strengthening Compliance to Withstand Tougher Audits and Avoid Civil and Criminal Penalties

Justice Department sets employment tax fraud abuse as leading enforcement priority

Recording of a 100-minute CPE/CLE webinar with Q&A


Conducted on Thursday, August 13, 2009

Program Materials

This seminar will explore the realities of the IRS' heightened scrutiny of corporate federal withholding tax compliance and offer best practices to improve a company's ongoing remittance of this tax.

Description

The IRS once treated withholding tax compliance lightly, satisfied if audited taxpayers simply got current on deficiencies. That changed recently when huge budget deficits drove the Justice Department's Tax Division to designate employment tax abuse and fraud as a top priority.

The government is not only imposing tougher penalties during audits but also applying harsher civil penalties, such as tax liens. Cases seen as abusive are being forwarded to the IRS Criminal Investigation Division for prosecution. Taxpayers are already feeling effects of the tough new policy.

Companies and their advisors must anticipate rigorous IRS inquiries into the amounts of their withholding, classification of permanent workers and independent contractors, and other relevant issues. Thorough review of the company's compliance and staff knowledge of the new approach are essential.

Listen as our panel of experienced federal income tax advisors prepares you for the reality of toughened withholding tax enforcement. The panel will offer best practices for reviewing and improving your company's compliance.

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Outline

  1. Background on federal employment tax oversight to date
    1. Enforcement has been relatively light compared with corporate income tax
    2. Most cases handled on audit; penalties light
    3. Shift in priorities with federal budgetary plight in 2008 and 2009-06-19
    4. Senate committee urges more prosecution of employment tax abuses
  2. The new IRS posture
    1. Designation of withholding tax as a top enforcement priority for the Justice Department Tax Division
    2. Business taxpayers immediately notice tougher stance by auditors
    3. Prospect of parallel civil penalties such as tax liens
    4. Prospect that some cases will be referred for criminal prosecution
  3. Reexamining a company’s withholding tax compliance
    1. Record in on-time remittance of full amounts
    2. Classifications of staff as either permanent employees requiring withholding, or as independent contractors
    3. Nature of payments to employees: Cash or off-the-books

Benefits

The panel will analyze these and other critical areas of employment tax oversight and compliance:

  • The reality of IRS investigations: What will it take for the Service to push a withholding tax matter into civil or criminal investigations?
  • The current tenor of audits: What kind of approach can your company expect from the IRS now?
  • The likely "red flags": What sort of classifications of employees and independent contractors, payment methods, etc. are likely to attract attention?
  • The priorities for improving withholding tax compliance: What should your company tax department do first?

Faculty

Daniel Rosenbaum
Daniel Rosenbaum

Member
Caplin & Drysdale

He has 35 years of experience with federal employment tax matters and currently specializes in tax controversies and...  |  Read More

GJ Stillson MacDonnell
GJ Stillson MacDonnell

Shareholder
Littler Mendelson

She chairs the firm's Employment Taxes Practice Group and is nationally recognized for expertise in federal and state...  |  Read More

Stephen Mopsick
Stephen Mopsick

Partner
Mopsick & Williams

His firm specializes in tax disputes, including employment taxes. He previously spent 30 years with the IRS Office of...  |  Read More

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