INSIGHTS & IDEAS

Detailed federal employment tax audits have begun

In November 2008 the IRS initiated a national research program regarding payroll taxes.  The program will include a minimum of 2,000 tax examinations conducted over a three year period.  The primary focus is officer’s compensation (S corporations), worker classification (employee vs. independent contractor), fringe benefits and reimbursed expenses.  The selection process is purported to be solely on a statistical basis.