Latest Updates for Payroll Professionals

As we step into October 2023, there are several noteworthy updates that payroll professionals need to be aware of. This article provides a comprehensive overview of the latest IRS guidelines and policies that could impact your work.

Increased IRS Compliance Efforts

The IRS is ramping up its efforts to ensure tax compliance among high-income earners, partnerships, and large corporations. This move comes in the wake of the Inflation Reduction Act, which has provided the necessary funding for this initiative. The aim is to restore fairness in tax compliance by focusing on high-income individuals and entities that have seen a significant decline in their audit rates over the past decade.

Advanced technology, including artificial intelligence, will be employed to detect tax evasion, identify new compliance threats, and enhance case selection tools. This will help to prevent unnecessary ‘no-change’ audits, thereby reducing the burden on taxpayers.

Expansion of IRS Chatbot Technology

The IRS is also expanding its chatbot technology, which has already served over 13 million taxpayers. This technology provides quick answers to basic questions for taxpayers who have received notices about potential underreporting of their taxes. The latest chatbot feature will assist taxpayers who receive notices CP2000, CP2501, and CP3219A, informing them of discrepancies between the tax information they provided and the information the IRS received from third parties.

Since January 2022, IRS voice and chatbots have helped more than 13 million taxpayers resolve their tax issues, including setting up approximately $151 million in payment agreements. The IRS plans to introduce additional bot technology features in the future to assist taxpayers with more complex issues.

IRS’s Payroll Professionals Tax Center Webpage

To stay abreast of all payroll-related updates, make sure to bookmark and regularly visit the IRS’s Payroll Professionals Tax Center webpage. This page is a treasure trove of hot topics relevant to the payroll community and provides links to draft forms, Tax Withholding Estimator, the Online Tax Calendar, and more.

Electronic Filing of Form 8300

Effective from January 1, 2024, businesses will be required to electronically file Form 8300, Report of Cash Payments Over $10,000. This is a departure from the current practice of filing a paper return. This change is part of the final regulations amending e-filing rules for information returns, including Forms 8300.

New Draft Forms, Instructions, and Publications on IRS.gov

The IRS has also released new draft forms, instructions, and publications. These include:

Draft Forms:

Form 4970 (Draft), Tax on Accumulation Distribution of Trusts
Form CT-1 (Draft), Employer’s Annual Railroad Retirement Tax Return
Form SS-8 (Draft), Determination of Worker Status for Purposes of Federal

Draft Instructions:

Instructions 944 (Draft), Employer’s Annual Federal Tax Return
Instructions 945 (Draft), Annual Return of Withheld Federal Income Tax
Instructions 2678 (Draft), Employer/Payer Appointment of Agent
Instructions 8941 (Draft), Credit for Small Employer Health Insurance Premiums
Instructions W-7 (Draft), Application for IRS Individual Taxpayer Identification Number
Instructions W-8EXP (Draft), Certificate of Foreign Government or Other Foreign Organization for United States Tax Withholding and Reporting

Draft Publications:

Publication 1167 (Draft), General Rules and Specifications for Substitute Tax Forms and Schedules

Stay tuned for more updates and ensure that you’re always in compliance with the latest IRS rules and regulations.