Fumbling Forecasts: From the Super Bowl to Tax Time
February 7th, 2012 by Troy Thibodeau
Predictions are a tricky thing to do. Take Super Bowl XLVI for example. Scores of fans got their pick wrong, and that’s with a minimum 50-50 chance. On the flip side, many predicted the New York Giants would win, but was it for the right reasons? Most of these fortune tellers probably didn’t have a team of sports analysts on their side (besides myriad sessions of ESPN watching), or know that Tom Brady would have a referee-called safety in the early minutes of the first quarter.
In the same vein, you can look at a football game like a year in tax compliance. It is constantly changing. Successful forecasting requires evermore enhanced analysis and insight. And ultimately you need the right tools to play when it comes down to the wire.
A good example is when the IRS recently updated their 2010 predictions, increasing the amount of information and withholding documents expected in 2012 from 2.175 billion to 2.855 billion. Where are these 700 million additional documents coming from? Businesses like you. The result is an increased chance of errors in your TIN and name information for all of the new 1099s you are filing.
This year in particular there were a variety of notable regulatory changes. For one, the IRS has shifted its focus on closing a newly announced $450 billion tax gap. In addition, “B” Notice fines for incorrect 1099 forms are increasing and new 1099-K and 1099-B forms are now required.
All things considered, some companies still look at the tax year as a compressed three-month sprint. The smart ones however look at it holistically, creating a game plan. They clean their TIN and name data the moment they get it. They are prepared to send out 1099s at a click of a button. All year long these companies stay on top of the ever-changing tax law. They don’t just look at compliance like it is a fourth quarter two-minute drill. These companies will be rewarded for their diligence at tax time. They came prepared, but they don’t need to go it alone.
Even with a plan, not every company has time or the resources to do everything necessary. Most that do could be more efficient at it. As a leader in the compliance industry, Convey keeps a close eye on the constantly changing pulse of the IRS and the legislation that governs it. Even so, begetting the risk that comes with the many changes in compliance every year isn’t easy. It requires a lot of time without the right tools.
All of these factors make compliance more complex and necessary to plan for. They also provide a chance to take the spotlight. Convey provides the no-hassle tools to do this with our Web-based software and in-house experts, but every situation is different. If we haven’t already, we’d love to discuss your tax-time game plan sometime soon.
Photo by AngieSix on Flickr.
Tags: 1099, 1099-K, Compliance, forecasting, IRS, predictions, Super Bowl, Super Bowl XLVI, tax gap, tax law, TIN, Tom Brady, Troy Thibodeau, withholding
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Convey provides tax information reporting services and software to businesses to make IRS compliance clear and uncomplicated. U.S. federal tax advice contained in this web site is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter that is contained in this document. (iii) The taxpayer should seek advice based on the taxpayer’s particular circumstances from an independent tax advisor.
