The number of IRS notices for payroll taxes and business taxes for 2020 and 2021 are beginning to increase. In some instances, these notices are related to pandemic-era Employee Retention Tax Credits (ERTC) and Paycheck Protection Program (PPP) loans.
These audits are time sensitive, so we recommend that should you receive a notice you contact your tax professional immediately so they can begin working with you to address the notice as soon as possible.
The increased frequency of business audits is not unexpected. The Inflation Reduction Act signed into law in August by President Biden included a provision earmarking nearly $80 billion in funding for the IRS that Treasury Secretary Janet Yellen said would help ensure fair enforcement of federal tax laws.
According to the IRS’s 10-year strategic operating plan released in April, the IRS plans to develop enforcement approaches and compliance treatments for tax types including federal employment taxes Earlier this year the Treasury Inspector General for Tax Administration (TIGTA) released a report calling for improvements to the employment tax examination process to increase taxpayer compliance and collection.
Again, if you receive any notice from any tax authority, please call us immediately.