87: Shedding Light on the New Requirements for Information Reporting
Over the past few years, the IRS has increased its compliance and enforcement efforts focused on payment transactions between US and foreign persons. However, these new information reporting requirements for compliance can be confusing and intimidating for taxpayers.What changes has the IRS made to tax information reporting requirements?On today's episode of the Taxgirl podcast, Kelly is joined by Tara Ferris to talk about the new requirements for tax compliance. Tara is a Principal in the Financial Services Office of Ernst & Young LLP. In this role, Tara advises multinational financial institutions and asset managers on customer tax reporting and withholding. In addition, she focuses on process and control improvements to create efficiencies and reduce risk. Before joining Ernst & Young LLP, Tara served as Senior Counsel and worked on matters relating to FATCA, non-resident alien withholding and reporting, and international aspects of domestic information reporting.Listen to Kelly and Tara discuss tax reporting requirements:There's more emphasis now on reporting requirements, either for US payments to foreign persons or foreign income received by US persons. How has the expansion of information reporting impacted the professional tax practice? How should tax professionals communicate to their clients and financial institutions that they work with which forums are important, and when they need to issue them?When working with financial institutions with clients who don't wish to be reported, how should tax professionals convince them that they need to give up the data, especially in countries where they may have built their entire system around the idea that it's secret?What should a taxpayer do if they think they're supposed to get a forum and didn't, or that form doesn't come through? Is that something that a taxpayer should have a conversation about with their financial institution or tax professional?Many clients struggle with the idea that they could have a reporting requirement that they aren't aware of or have reporting requirements they didn't even know existed. As a tax professional, how should one advise clients to figure out what those are?Kelly and Tara discuss reporting and the burden on the taxpayer to make sure that that information is correct, keep records, and balance the way they use their tax data.With the recent changes in tax reporting requirements, will taxpayers need to be reeducated on what is taxable and what is not? Are we suffering from an overreliance on tax forms to navigate this new territory?Now that more mainstream financial institutions adopt crypto in various forms, could this make it easier or harder for the IRS to enforce crypto reporting? Tara and Kelly provide their opinions about the long road ahead for crypto reporting and tax preparation.Tara speaks on her predictions of the tax reporting space in the upcoming years.To subscribe to the podcast (it’s free!) using Apple, Spotify, or your favorite listening app, click here.Links mentioned:Kelly’s Website: TaxgirlTara’s LinkedIn: Tara Ferris EY Tax Operations: Customer Tax Operations and Reporting Services
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