Tax & Accounting Blog

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Penalties for Failure to Comply with NRA Withholding and 1042-S Information Reporting: Part 2 – A Penalty for Late Deposit

The IRS prescribes when deposits of NRA withholding are required in IRS Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities. A payer who fails to make a required deposit of withheld taxes within the time prescribed is liable for a penalty on the underpayment (i.e., the excess of the … Read More

Who’s a Form 1099-K Filer and Who’s Not?

Who’s a Form 1099-K Filer and Who’s Not?

This IRS Letter Ruling Adds to Our Understanding IRS Letter Ruling 201201001 illustrates that the structure of a business that manages prescription drug benefit plans puts it outside the purview of I.R.C. Section 6050W information reporting (Form 1099-K). The conclusion was based on the fact that the business serves plan sponsors on the one hand and makes … Read More

Penalties for Failure to Comply with NRA Withholding and 1042-S Information Reporting – Part 1

Penalties for Failure to Comply with NRA Withholding and 1042-S Information Reporting – Part 1

In August of 2010, the IRS announced “executing our international strategy is a top priority, and our work continues to intensify in this area.” Included in this strategy is a requirement for examiners to review withholding and reporting on payments to foreign individuals and entities during corporate audits. Other organizations should anticipate that the IRS will apply … Read More

$385 Billion in Unpaid Federal Tax Falls into the Tax Gap, New IRS Study Reports

$385 Billion in Unpaid Federal Tax Falls into the Tax Gap, New IRS Study Reports

The IRS has released a new set of tax gap estimates for tax year 2006 (the most recent year for which these figures are available). The tax gap is defined as the amount of tax liability faced by taxpayers that is not paid on time. Much of the tax gap amount is never paid, largely due … Read More