As a result of the AMERICAN RESCUE PLAN ACT (a COVID related relief bill passed in March of 2021), these popular payment apps must report all transactions from accounts with over $600 commercial transactions in a year to the Internal Revenue Service (“IRS”). However, despite other sources claiming that the IRS is taxing these transactions, the reporting requirement simply provides the IRS with information that can be used to enforce existing rules (i.e., the requirement that taxpayers provide 1099s to individuals or businesses where the taxpayer paid over $600 in the taxable year).
In response to this new requirement, taxpayers should take care to correctly tag transactions, if possible, in their payment app. This is especially important when dealing with personal transactions on these platforms, as failure to do so could cause the transactions to be reported to the IRS as business related transactions.
While the impact of the new reporting will be minimal, it is causing disproportional concern to taxpayers because of inaccurate or misleading articles on the internet.
If you have any questions or concerns about this or any other legal or tax related issue, contact WEGNER LAW PLLC today at (239) 449-9200 or by email at firstname.lastname@example.org.
The Internal Revenue Service recently issued a Request for Proposal to software companies for specialized software to comb through social media and collect information on audit suspects. It is not clear when the new program will start; however, in the RFP, the IRS expressly stated that the software is to target those already under audit and not to sweep social media for potential audit targets.
Regardless, this is yet another reason businesses and individuals need to be careful with their official and personal posts on Facebook, Instagram, Twitter, etc.
The Internal Revenue Service is adding artificial intelligence (or “AI”) to the agency’s tool box for identifying potential audits or criminal tax evaders. The AI works by taking in all available information from past and present IRS audits and prosecutions to discover any pattern of factors that results in more changes at audit or convictions for tax fraud.
The AI will then apply any patterns when reviewing new tax returns and mark any that the computer thinks demonstrate increased likelihood of significant changes under audit or criminal conviction.
As voluntary compliance with US tax code is declining and the number of tax returns the IRS most process, expect the Service to turn to more and more advanced technology like AI in its fight to collect as much money as possible.
If you want advice on avoiding problems in the future or you under audit and need help now, contact P. Christopher Wegner at 239.449.9200 or email@example.com.
The IRS announced that it its Large Business and International division will continue to look at international tax compliance in taxpayer audits. This is no big surprise as the division has named cross-border taxation as an issue of primary concern each year for almost the past decade.
As such, this announcement serves as a reminder that the IRS is serious about enforcing the international tax laws and that ignorance of the rules will not protect you or your company from a costly audit and, possibly, penalties.
Call or email Chris Wegner today for more information.