Here's something for business owners to look forward to in 2010 ... random IRS audits of payroll tax practices. With an estimated $14 billion in corporate tax underpayments every year, the IRS is ramping up an enforcement plan that will identify and target businesses with the greatest compliance risks. Those companies will be targeted for future audits. The IRS reportedly has its sites set on everything from executive compensation to fringe benefits, and some businesses have already received requests for documents.
"The major focus will be the traditional hot-button issues - worker classification, fringe benefits, reimbursed expenses and executive compensation," says  Elizabeth Schartz of Thompson & Knight's Dallas office. "You can expect increased activity from both federal and state agencies that are looking to increase revenues in a difficult economic environment. Employers need to get ahead of the issue now by conducting a preemptive self-audit to correct any problems."
Reports Reuters: The audits will begin in February 2010 and stretch across all types and sizes of companies. The exams will be deeper than typical audits, and also look at the use of independent contractors and other worker classification issues.
IRS Commissioner Douglas Shulman has said the agency will focus on the wealthy and large corporations as it seeks to recover billions that go unpaid in taxes each year.