This Issue - March 2017

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Kevin Mankowski

New Administration Brings the Possibility of Mandatory E-Verify

2017 has already brought changes to the payroll process: Michigan’s minimum wage has been raised to $8.90 per hour and Form I-9 has been updated for newly hired employees. There are also some changes still to come, including modifications to the Affordable Care Act, new overtime rules, and the possibility of an E-Verify mandate from the new administration.

E-Verify is an internet based system that compares information from an employee’s Form I-9 to data from U.S. Department of Homeland Security and Social Security Administration records to confirm employment eligibility. Employers submit information from a new hire’s I-9 through E-Verify, and the system matches government records to determine whether the new hire is authorized to work in the United States.

The program is available for use now and has existed under its current name since 2007. For the time being, it is voluntary for most employers. Some states have already passed legislation requiring the use of E-Verify when hiring any employee. Other states only require the program when hiring government employees. As of November 2016, approximately 650,000 employers are using E-Verify. That number represents about 11% of all employers in the United States.

President Donald Trump has made his feelings on illegal immigration well known during his campaign. One of his tactics to curb illegal immigration is to require the use of E-Verify nationwide. What will this mean to employers? Presently, employers are already tasked with ensuring they hire a legal workforce through the use of Form I-9. With the possible addition of a nationwide E-Verify mandate, more responsibility will be placed on the shoulders of employers. Kinks in the system will need to be worked out before it is implemented or many employers and employees could be negatively affected. Although the percentage of issues is very low, delayed verifications and false-positives are two of the problems the current system is experiencing. If the issues are projected nationwide, many legal workers might be denied the right to work.

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Tax Alerts
Tax Briefing(s)

As the new administration and Congress get to work, tax reform is high on the agenda. Although legislative language has not been yet released, statements from tax writers in Congress shed some light on various proposals.

The filing season is the most active time of the year for tax scams. These scams take every shape and form, ranging from telephone calls to individuals to sophisticated schemes targeting employers and businesses. The goal of all these scams is identity theft. Using legitimate identities of unsuspecting individuals allows criminals to file fraudulent returns and claim bogus refunds.

The Treasury Inspector General for Tax Administration (TIGTA), in its recently released final report for the 2016 filing season, highlighted the IRS’s response to what was good and what was bad about its performance. It signals what the IRS is doing during the 2017 filing season currently underway to improve things (TIGTA, Ref. No. 2017-40-014). Nevertheless, although the IRS had improved in a number of areas with respect to the 2016 filing season, TIGTA reports that the agency continues to be plagued by numerous challenges.

The first step is to determine if you qualify for the federal fuel tax credit. The IRS has uncovered significant fraud associated with the fuel tax credit and is watching for fraudulent claims. The credit is not available to most taxpayers but only to qualified taxpayers, such as taxpayers engaged in farming. However, some ineligible taxpayers claim the credit in order to inflate their refunds. Fuel tax credit fraud can result in a penalty of $5,000.

Tax-related identity theft spikes during the filing season. Many taxpayers discover for the first time that they are victims of identity theft when they receive a letter from the IRS.

As an individual or business, it is your responsibility to be aware of and to meet your tax filing/reporting deadlines. This calendar summarizes important federal tax reporting and filing data for individuals, businesses and other taxpayers for the month of March 2017.


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