TIGTA Releases Three Reports, Including Report on Improving Employment Tax Compliance in the Gig Economy: Today, the Treasury Inspector General for Tax Administration (TIGTA) released a report on the results of an audit initiated to assess the efficiency and effectiveness of the IRS’s SS-8 Program which the IRS uses to address worker classification issues. The determination of whether a worker is an employee or an independent contractor has significant tax implications for the worker, the business, and the IRS. Specifically, the audit examined whether the SS-8 Program has adopted a strategic approach for worker classification issues related to the gig economy. TIGTA found, among other things, that, while there are a large number of workers participating in the gig economy, the SS-8 Program does not track Form SS-8 submissions from gig economy workers. TIGTA also found that the SS-8 Program lacks guidance about workers in the gig economy. TIGTA recommended that the IRS create guidance and training for gig economy Form SS-8 requests. Further, TIGTA recommended that the IRS evaluate whether businesses are complying with determinations and consider program changes and referrals to increase business compliance with worker classification determinations.
In addition, TIGTA released two other reports today. One report found that improved controls are needed to ensure that corrective actions for reported information technology weaknesses are documented and fully implemented prior to closure. The other report focuses on the audit initiated to review the IRS systems outage that occurred on April 17, 2018 and identify solutions to prevent future disruptions.
Miscellaneous Guidance: Notice 2018-71 provides guidance on the employer credit for paid family and medical leave under section 45S. The credit may be claimed by eligible employers and is equal to a percentage of wages paid to qualifying employees while they are on family and medical leave. The credit generally is effective only for wages paid in taxable years of the employer beginning after December 31, 2017, and before January 1, 2020. The notice provides guidance on issues arising under section 45S, including the requirements an employer must satisfy to be an eligible employer, the types of leave that are family and medical leave under section 45S, the minimum paid leave requirements, the calculation of the credit, and the impact of state-mandated leave on the availability and calculation of the credit. The notice also announces that Treasury and the IRS intend to publish proposed regulations under section 45S.