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 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 clients and financial institutions which forms matter and when to issue them?
• When working with financial institutions and clients who don’t want to be reported, how should tax professionals convince them they need to provide 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 form 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 they aren’t aware of, or that they 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 ensure the information is correct, keep records, and balance how 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 overrelying 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 share their views on the long road ahead for crypto reporting and tax preparation.
• Tara shares her predictions for the tax reporting space in the coming years.

More about Kelly:

Kelly is the creator and host of the Taxgirl podcast series. Kelly is a practicing tax attorney with considerable experience and knowledge. She works with taxpayers like you every day. One of the things she does is help folks out of tax jams and, hopefully, keep others from getting into them.

You can find out more about Kelly here, and you can follow her on Twitter, Facebook, Instagram, and LinkedIn.

To subscribe to the podcast (it’s free!) using Apple, Spotify, or your favorite listening app, click here.

Links mentioned:

Kelly’s Website: Taxgirl

Tara’s LinkedIn: Tara Ferris 

EY Tax Operations: Customer Tax Operations and Reporting Services