IRS Reorganizing Small Business Enforcement – Should You Care?

The IRS recently announced that effective October 20, 2014, it will be dividing and reorganizing responsibilities between the Small Business/Self Employed (SB/SE) division and the Wage & Investment (W&I) division. Personnel will stay the same but duties and processes will be modified to align with the new division of responsibilities. But the big news is – who should care?

The SB/SE division has long been the bane of the small business owner. SB/SE was supposed to provide support and assistance for small businesses and assist them in becoming compliant, getting answers to questions and addressing other tax related needs in addition to performing examinations as required.

The W&I division focused on payroll tax and trust fund recovery as a primary strategy but routinely found itself embroiled in other tax-related business matters as well.

As a result of the confused responsibilities, neither division worked very efficiently either in terms of tax help or tax compliance, with lots of duplication of effort and lots of broken processes. But going forward, W&I will focus on pre-filing compliance and Identity Theft issues exclusively and SB/SE will focus on post-filing compliance.

This change is targeted to addressing the inefficiencies and if you’re a small business owner you should care. This change could mean that both divisions become more effective and efficient which means as a small business owner, you’ll need to increase your compliance efforts as well, or at least keep an eye on the situation.

The IRS has never been known for leading edge technology or innovation and reorganizations like this often result in change for change sake but no real improvement. But assuming that’s going to happen in this case is dangerous – like putting all your eggs in one basket. If you’re concerned about your compliance to IRS business requirements, now is the time to tighten things up so you’re prepared if the reorganization really does allow the IRS to spend more time addressing business compliance and examination.

If you need help assessing your status, contact us today to schedule your free tax consultation. Call (480) 888-7111 or submit a web request here.