The Internal Revenue Service is to complete its hiring of 600 revenue officers by September and also plans payroll tax compliance sweeps across the country later this year, the agency said Aug. 27. About 72% of the revenue collected by the IRS comes from payroll taxes that are withheld by employers, making noncompliance a big problem for the U.S. tax system, the IRS said.
With Congress expected to return Sept. 9 from its summer recess, the IRS included a reminder to lawmakers about the importance of payroll tax compliance in Publication 5084, “IRS Congressional Update.” The publication, also published in February after a nearly month-long government shutdown ended Jan. 25, was aimed at House and Senate members as well as staff members. It included other tax issues, but the payroll compliance issue was the first item addressed in the document.
“Employers know the rules—they must deposit and report employment taxes accurately—this is nonnegotiable,” said Don Fort, chief of IRS criminal investigations.
The latest update comes at a time of heightened recession risks, global trade turbulence, signs of slowing U.S. economic growth, and federal budget constraints.
“Enforcement is never our first resort, but protecting this significant source of revenue to the nation deserves our best efforts, including reaching out to help businesses help themselves,” said Darren Guillot, director of IRS field collection operations.
The new revenue officers, part of a hiring program that was announced in April, are to investigate potential fraud, said the agency, which earlier this year reported that criminal investigations led to six people or businesses sentenced for crimes associated with payroll taxes.
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