Employment Tax Under Scrutiny Again: IRS Announces Audit Criteria for HIRE Act Exams

Following on the heels of the IRS announcement that a problem was identified in the way the first quarter HIRE credit (line 12e) was applied when computing the Failure to Deposit (FTD) penalty on second quarter Forms 941, IRS announced the audit criteria for HIRE Act examinations. John Tuzynski, Chief of Employment Tax Operations, IRS Small Business/Self Employed Division, said an IRS enforcement initiative is under way for employers that claimed tax credits under the HIRE Act.    He indicated that the exams focus on verifying Forms W-11, payroll amounts claimed by employers and hire dates.   Approximately 1000 returns are in the audit process.  Because of the complex nature of these exams and identified IRS system errors, it is recommended that companies seek tax counsel assistance before the IRS arrives, but especially if it does arrive .

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