IRS updates employment tax examining structure
Wednesday, February 13, 2019

IRS updates employment tax examining structure

By Payroll and Entitlements Editorial Staff

The IRS has updated its examining process related to Employment Tax - Employment Tax Objectives and Organization. The procedure details the basic structure of the Employment Tax organization, including the overview of Internal Revenue Manual (IRM) 4.23, the Employment Tax IRM. These procedures apply to all Large Business & International (LB&I), Tax Exempt/Government Entities (TE/GE) and Small Business/Self-Employed (SB/SE) employees dealing with employment tax issues.

The Employment Tax Program is governed by Policy Statements and other internal guidance that apply to all Service personnel regardless of operating division. The Policy Statements apply to all employment tax issues and examinations. Employment Tax (ET) Examiners should review these Policy Statements to properly perform their examination duties. The IRS adopted the Taxpayer Bill of Rights in June 2014. Employees are responsible for being familiar with and acting in accord with taxpayer rights. The Service recognizes the significant benefits that can accrue from working with taxpayers to understand problems and practices unique to a given industry. Voluntary compliance will improve if taxpayers understand their tax obligations. Compliance is achieved when a taxpayer makes a diligent effort to meet the requirements of the law. The law requires that the taxpayer take affirmative action to meet his/her legal obligations. In the application of employment taxes from one year to another, the Service should apply the rules in a consistent way for all taxpayers. In dealing with the government, taxpayers base their perceptions about the fairness of the system in major part on the information they receive from friends, relatives and acquaintances. Thus, it is important that the IRS take into account how others have been treated in administering the employment tax system to ensure that the goal of administering employment taxes in a consistent manner is met.

In addition, taxpayers are given the opportunity to have their interests heard and considered. Taxpayers should have an opportunity to communicate with the Service about specific details of the case. Internal procedural complexities should not make it more difficult for the taxpayer to resolve his/her case. IRS personnel need to take an active approach to case resolution and, to the maximum extent possible, remove internal barriers so that the taxpayer’s case receives fair and expeditious consideration. To ensure an efficient Employment Tax Program, it is important that all ET Examiners be aware of their responsibilities to enforce the employment tax provisions of the Internal Revenue Code in accordance with provisions set forth in the IRM. ET Examiners would carry out their responsibilities during any examination by properly raising, developing and resolving any employment tax issue. (Internal Revenue Manual, IRM 4.23.1, November 30, 2018.).

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