Government Affairs Task Force Federal Tax Forms and Publications Subcommittee 2013 Recommendations

Transcription

1 Government Affairs Task Force Federal Tax Forms and Publications Subcommittee 2013 Recommendations Form W 2 Instructions Page 1 first column Contents Observation Although the Contents and What s New both appear on the same page, Reminders also appears on the first page and is included in the Contents. Including What s New in the Contents would potentially give the What s New section more exposure and make it consistent with other forms. Recommendation Add What s New to the Contents on page 1. Page 1 first column What s New Observation At the end of the first paragraph under What s New, the reader is directed to see Health flexible spending arrangement (FSA) but is not told where to find it. Recommendation Give direction where to find referenced sections. Add a hyperlink so when the reader clicks Health flexible spending arrangement (FSA) they are brought to page 9. Page 1 second column Reminders Observation It may be hard for employers to tell where to look in the instructions without looking at the index. For example, military differential pay appears as a reminder with a cross reference to the Special Reporting Situation. This is also the case for foreign agricultural workers. Recommendation Combine the Reminders and Special Reporting Situations sections. Pages 2 29 page footer Observation At the bottom of each page from 2 29, it says General Instructions for Forms W 2 and W 3 (2012). It should say 2013, not Recommendation Make sure that the page footer for the 2014 instructions says General Instructions for Forms W 2 and W 3 (2014). Page 2 first column Electronic Statements for Employees Observation The reader is directed to See Pub. 15 A but is not directed where in the publication to find the information. Recommendation Hyperlink Pub 15 A to Pub 15 A instructions section on furnishing electronic statements to employees.

2 Page 2 first column last paragraph Observation The first bullet says 5 or fewer Forms W 2c and the second bullet says more than 5 Forms W 2c. Recommendation Replace the first bullet to read 25 or fewer Forms W 2c and replace the second bullet to read more than 25 Forms W 2c. Page 2 second column Military Differential Pay Observation This paragraph is in the Reminders section, but the last sentence is See Military differential pay. This is confusing since it is almost as if it refers the reader to the same paragraph instead of the military differential pay section in the Special Reporting Situations for Form W 2 (page 10). Recommendation Delete See Military differential pay from Reminders section Change See Military differential pay to See Military differential pay under Special Reporting Situations for Form W 2. Or See Military differential pay on page 10. Page 9 first column 4 th line from the bottom of the page Recommendation Remove However from However, any uncollected and begin sentence with Any uncollected Page 9 second column Health Savings Account (HSA) Observation Some parts of the paragraph say contribution and others say contributions Recommendation Add an s to contribution in the first sentence so it reads An employer s contributions instead of An employer s contribution Page 14 first column Box 1 Observation Some people read total taxable wages, tips, and other compensation to be gross taxable wages and some read it to be federal taxable wages. Recommendation Remove (before any payroll deductions) from the instructions. Page 15 second column Box 8 Observation The instructions imply that all food and beverage establishments will have allocated tips. This may confuse employers. Recommendation Modify the instructions to read: If you are a large food and beverage establishment, show the tips allocated to the employee, if any. Page 21 second column third to last paragraph Observation The reader is referred to the Repayments section, but it would be helpful to click on it and the reader is taken to that section. Recommendation Make Repayments a hyperlink to the corresponding section.

3 Page 22 first column, second paragraph Observation The reader is referred to BSO, but there is no link to the BSO website. Recommendation Add a hyperlink to BSO Page 24 second column second to last paragraph Observation There is no information about the threshold for Form W 2c electronic filing. Recommendation Add a paragraph providing information about electronic filing. Suggested wording could be: If you file Forms W 2c during a calendar year to correct 250 or more Forms W 2 filed for the previous calendar year, you must file them electronically unless the IRS grants you a waiver. You may be charged a penalty if you fail to file electronically when required. Specifications for filing Forms W 2c electronically can be found here: Page 27 Form W 2 Box 13 Retirement Plan Checkbox Decision Chart Observation In the row where the 1 st column says Defined contribution plan (for example, a 401(k) or 403(b) plan; a Roth 401(k) or 403(b) account; but not a 457 plan), the answer in the 3 rd column is No when it should say Yes. IRS has acknowledged this earlier in the year. Recommendation Change No to Yes in the Check Retirement Plan Box? Column for that row.

4 Form 2159 Observation It is difficult to discern which part the employer is responsible for reading and filling out and which part the employee is responsible for reading and filling out. Recommendation 1) Keep all the employer information together and all the employee information together. For example, put all the employee information on the top half of the form and all the employer information on the bottom half, or 2) Put a hard break/bold line above I am paid every to make it easier to distinguish between employer and employee information, or 3) Mark off the employer section in the upper left corner, with perhaps a darker border or header, or 4) Insert EMPLOYEE above the I am paid every section, like the EMPLOYER section above to tell the employee she needs to fill out this section. Observation Sometimes the form refers to the employee as I and other places is refers to the employee as you/your. Recommendation Make employee references simpler and uniform by changing I and you/your to Taxpayer. Observation The form is voluntary for employers. The form does not have any recommendations for when the employer chooses not to participate. Recommendation Include language in the Instructions to Employer section If you do not agree to participate Suggestions 1) Write decline to participate on the face of the agreement and inform the taxpayer to return the form to the IRS, or 2) Inform the taxpayer that you will not participate and tell her to return the form to the IRS, or 3) Your employer is not required to accept or act on this agreement. If your employer does not accept this agreement you may need to make other arrangements with the IRS.

5 Form 8027 Observation Line 2 gives the impression that the amount is the number of charge receipts as opposed to the dollar amounts on the receipts Recommendation Reword Line 2 to read Total sales on charge receipts showing charged tips (see instructions).

6 Form 8027 Instructions Page 1, first column, Reminders second paragraph Observation Below in the paragraph confuses the reader since the worksheet is located to the right. Recommendation Remove below or reword from Complete the Worksheet for Determining Whether To File Form 8027 (below) to determine if you must file Form Page 1, first column, Reminders fourth paragraph Recommendation Insert hyperlink to Pub 1239 If you file 250 or more Forms 8027, you must file the returns electronically. See Pub Page 1, first column, Reminders last paragraph Recommendation Remove reference to tip program, since it expired in Page 1, first column, Who Must File Observation The reader can confuse activity with establishment in There may be more than one establishment (business activity providing food or beverages) operating within a single building, and, if gross receipts are recorded separately, each activity is required to file a Form Recommendation Change each activity to each establishment Page 1, first column, Who Must File Observation Establishment is not defined fully in A return is required only for establishments in the 50 states and the District of Columbia. Recommendation Change establishment to large food and beverage establishment. Page 1, second column, first paragraph Recommendation Add a hyperlink to Form 8027 T in the following paragraph If you are required to report for more than one establishment, you must complete and file Form 8027 T, Transmittal of Employer's Annual Information Return of Tip Income and Allocated Tips, with Forms Page 1, second column, second paragraph Recommendation Reword the third bullet from More than 10 employees who work more than 80 hours to More than 10 employees whose combined working hours total more than 80 hours Page 1, second column, second paragraph Observation There is no reference to the worksheet below in the third bullet Recommendation Add (see Worksheet for Determining Whether to File Form 8027 below) after More than 10 employees who work more than 80 hours were normally employed on a typical business day during the preceding calendar year. Page 2, first column, Exceptions to filing Observation Fast food restaurants and operations where tipping is not customary such as cafeterias or operations where 95% of the total sales are carryout sales or sales with a service charge of 10% or more. reads like a run on sentence

7 Recommendation Break up the sentence to read Fast food restaurants and operations where tipping is not customary. For example, cafeterias or operations where 95% of the total sales are carryout sales or sales with a service charge of 10% or more. Page 2, first column, Where to File Observation The Note above Where to File and the Note below it are repetitive. Recommendation Remove the Note above Where to File because it is repeated within the Note below. Page 3, first column, third bullet Observation The sentence is confusing to the reader and would be easier read with parentheses inserted. Recommendation Insert parentheses in: Detailed description of the establishment that would help to determine the tip rate. The description should include the type of restaurant, days and hours of operation, type of service (including any self service), the person (waiter or waitress, cashier, etc.) to whom the customer pays the check, whether the check is paid before or after the meal, and whether alcohol is available. Page 5, second column, last sentence Recommendation Link back to the worksheet on the 1 st page. Instead, see the Worksheet for Determining Whether To File Form 8027, earlier.