COS. FORESEE MORE TAX AUDITS
New York - As governments desperately seek all kinds of additional revenue, senior business professionals see the increased possibility of an audit by taxing authorities as the most significant tax risk facing their organizations today, according to a new survey.
Some 30 percent of more than 500 respondents polled during a recent webcast by KPMG's Tax Governance Institute identified the possibility of a tax audit as their No. 1 risk. Also high on the list of anticipated tax risks were increased regulatory requirements (27 percent) and the accuracy of tax provisions (26 percent).
Identifying and increasing the potential use of tax refunds, credits and incentives has been the top tax area of focus by companies in the past six months, according to 37 percent of respondents. Compliance and reporting has been the tax function most focused on by companies, according to 44 percent of respondents, followed by enhancing tax savings (21 percent).
A majority of companies (69 percent) view tax risk management as an integral part of their organization's enterprise risk management policy.
Most companies (51 percent) said that reporting by the company's tax function to the board and audit committee has remained about the same, while 18 percent said that such reporting has seen an increase over the past six months.
COMPLIANCE WITH FUEL EXCISE TAX IN DOUBT
Washington, D.C. - Neither the Internal Revenue Service nor the Federal Highway Administration knows how much money in excise taxes for motor fuel goes uncollected every year, according to a new report.
The Treasury Department's Inspector General for Tax Administration audited the IRS's implementation of an electronic system for reporting and tracking compliance with the fuel excise tax, and noted that the IRS does not have an accurate estimate of the motor fuel excise tax compliance gap. The Federal Highway Administration estimates the motor fuel excise tax gap to be a minimum of $1 billion annually, but it could be as much as 25 percent of total revenues.
TIGTA's report acknowledged that the IRS has made significant progress in improving motor fuel excise tax compliance, including implementing electronic filing requirements for excise tax reporting documents; increasing outreach initiatives to improve awareness of electronic filing requirements; developing strategies aimed at understanding areas of noncompliance; and assessing nearly $135 million in additional taxes through April 2008.
The effectiveness of the compliance program is limited, however, because the IRS does not receive product receipt and disbursement information from refineries similar to the information it receives from fuel terminals, the report found. The IRS has increased the penalties for failing to file fuel transactions electronically from $50 per failure to $10,000, but it uses the penalty primarily as a tool to compel compliance, rather than as a sanction.
(c) 2009 Accounting Today and SourceMedia, Inc. All Rights Reserved.
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