Daily Tax Update - October 26, 2016: TIGTA Report Finds Taxpayers are Avoiding Billions of Dollars in Backup Withholding

TIGTA Report Finds Taxpayers are Avoiding Billions of Dollars in Backup Withholding:  In a report released today, Treasury Inspector General for Tax Administration (TIGTA) presents the results of its audit assessing the IRS’s actions to ensure compliance with backup withholding provisions.  TIGTA’s review found that although the majority of information returns are submitted by payers with valid tax identification numbers (TINs), nearly $9 billion in backup withholding tax was not withheld by payers submitting information returns with missing or incorrect TINs for tax year 2013.  TIGTA recommended that the IRS establish an agency-wide information returns backup withholding enforcement strategy, document criteria used to exclude payers from receiving a notice, and include specific actions that will be taken to address information return reporting of income under a deceased individual TIN as part of the development of the IRS’s agency-wide information returns strategy.

IRPAC Issues 2016 Annual Report:  Today the Information Reporting Program Advisory Committee (IRPAC) issued its annual report for 2016 to IRS Commissioner John Koskinen on new and continuing issues in tax administration.  The report includes recommendations involving the penalty abatement process, the Form W-9, Request for Taxpayer Identification Number and Certification, and the use of Frequently Asked Questions on the IRS website.  The report also makes certain recommendations regarding the Foreign Account Tax Compliance Act (FATCA) and the Affordable Care Act (ACA).