Business & Finance Taxes

IRS Seeks External Information to Get Unpaid Taxes

As the pressure mounts on the IRS to raise more taxes to help bridge the seemingly ever-increasing government deficit, the federal tax institutions are now coming up with any means possible to get any unreported and unpaid taxes in efforts to bridge the tax gap.
One of the recent methods of tax collection that the IRS is said to be using to generate funds is the acquisition of state information on land transfers.
The IRS hopes to get information on any land transfers that have been done as a gift with no gift tax paid for the transmission.
To start off with, the IRS has targeted 16 states and is reviewing transfer information for land and property valued over $13,000.
00.
Most of the victims that are targeted by this move are individual taxpayers, as corporations will generally report any land transfer dealings in their tax returns.
Though the corporate taxpayers may not have been significantly affected by this recent IRS move, they are not entirely safe from the IRS's hunt for non-tax related information in its quest for unpaid taxes.
As the IRS continues to seek external and non-tax information to get leads into unpaid taxes, tax experts say that corporate organizations are actually the most vulnerable.
This is because a lot of information on most corporate organizations is easily available online and on other public domain infrastructures.
The availability of information on these businesses makes them easy targets for the IRS's recent objectives for scrutinizing.
Some of these information sources include social networking websites, internet forums and blogs, "leaks" websites, and other modern information sources.
As information becomes more readily available to the public, company tax managers should become more concerned about how such information affects the tax-status of their businesses.
For example, a company news article that reveals an increased share of the company's American business could cause the IRS to review the company's stand on payments of royalties to an overseas franchise.
On the other hand, information on the internet revealing a company's strategic shift from local manufacturing to outsourced manufacturing (overseas) could also cause the IRS to review or disallow any local manufacturing tax credits that the company could be benefitting from.
Therefore, a company will need to be more concerned about and vigilantly manage the amount of its information that is accessible in the public domain.
The management department of a company should aim to control and monitor any sensitive information as much as they can within their power.
As substantial information may risk getting released into the public sphere (as in through "leaks" or disclosures from employees), companies now need to caution their employees on the impact of such disclosures, especially when they could lead to unwanted IRS attention.

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