The Internal Revenue Service has announced it’s going to increase the number of business audits. And here’s the kicker: It’s because the agency says it needs a little practice at the task.
The IRS just announced it’s rolling out its first National Research Program (NRP) in about 15 years this November. The agency says the reason for the program is to:
- improve agency compliance efforts, and
- better use existing resources.
For employers, this means a much greater chance of being audited over the next three years, because up to 2,000 companies could end up in the NRP over each of the next three years, IRS’s Anita Bartels told attendees of the American Payroll Association’s Annual Congress.
The selection process, which is already underway, is based on a statistical sample.
Rest assured, just because your firm gets audited doesn’t mean it did something wrong (e.g., file an incorrect return). Still, it can’t hurt to review now the four areas IRS says its examinations will focus on: worker classification, fringe benefits, nonfilers and officers’/directors’ compensation (especially S corporations).