State Information Reporting and Withholding Services. Supporting your advisory, assessment, compliance, remediation and customer service needs

Transcription

1 State Information Reporting and Withholding Services Supporting your advisory, assessment, compliance, remediation and customer service needs

2 Is it time to consider State Information Reporting and Withholding Services? State information reporting and withholding requirements can vary by jurisdiction, making compliance both timeconsuming and complex. Similar to federal requirements, businesses must comply with state and local mandates to maintain tax documentation, withhold and/or report payments made in conjunction with certain products or services they provide. Furthermore, state information reporting and withholding (SIRW) requirements can vary by jurisdiction, making compliance both time consuming and complex. Failure to comply with these state and local requirements can result in penalties, interest, withholding tax liability and other adverse consequences, and taxing authorities are increasing their enforcement activities in an effort to curtail fraudulent reporting and recover lost income. Services can be combined where business need warrants a turnkey approach to SIRW. Our comprehensive advisory services include research, gap analysis, onboarding, documentation, return and information statement preparation, remediation and a customer call center for responding to payee inquiries. Our state information reporting services complement Ernst & Young LLP s existing federal information reporting and withholding services, offering businesses the continuity and convenience of an integrated network of experienced professionals across the US. What is the nature of your operations? The nature of your business and the types of transactions you engage in will determine the complexity and scope of your state information reporting and withholding requirements. Following are examples of businesses with a higher than usual state information reporting volume. Businesses that currently have a high volume of federal information returns and statements Businesses with operations in multiple states Companies with a large contractor population Publicly traded companies with stock Financial services organizations with various product offerings: Banks Insurance companies Brokers/dealers Lenders Credit card issuers What is your audit exposure? Audit activity tends to be greater in states that are aggressive in their pursuit of untapped individual tax revenues from sources such as: Nonresident income tax Independent contractor enforcement Nonresident alien (NRA) income for reporting purposes Regulatory noncompliance penalties, even when no tax withholding is required 2 State Information Reporting and Withholding Services

3 State Information Reporting and Withholding Services Our comprehensive approach to state information reporting and withholding When it comes to meeting their information reporting requirements, businesses need to know not only that returns are filed on time and payee statement deadlines are met, they also need to meet governance requirements and be responsive to customer inquiries. Our service delivery approach provides essential management tools and reports for meeting and reviewing technical requirements and a network of experienced tax professionals to support inquiries from internal teams, customers and taxing authorities. Our approach to state information reporting and withholding provides you with a unique opportunity for efficiency and reduced exposure. Remediation Gap analysis Technology Withholding management Requirements review People Information return and statement processing Documentation Onboarding Compliance support Customer care center Employment Tax Advisory Services 3

4 State information reporting and withholding Process review Technical requirements Gap analysis Remediation Activity After federal information reporting review, determine additional state requirements for applicable states based on product and service offerings and/ or entity line of business breakdown. Review client s state documentation, withholding and reporting processes by seeking answers to targeted questions through client interviews and checklists. Assist client in the development of procedures and controls needed to maintain state documentation, withholding and reporting compliance. Outcome Consolidate and provide a summary of tax technical state requirements as they apply to the client s specific product and service offerings. Focused approach to resolve noncompliance resulting from state requirement misinformation, process and control failure, technology weakness, etc. Control framework complementary to federal information, reporting and withholding remediation recommendations, which may include internal directive recommendations or external assistance/ outsourcing. Work product Reference sheets outlining the state documentation, reporting and withholding requirements for applicable forms. Stoplight assessment report highlighting areas of known noncompliance and/or gaps in processes and controls including documentation, operational protocols and annual procedure updates. A short- and long-term action plan co-developed with stakeholders to reduce exposure in states with information reporting and withholding requirements. 4 State Information Reporting and Withholding Services

5 State information reporting and withholding Managed services Documentation and onboarding Compliance support Customer care center Activity Assist or complete the onboarding activities necessary to generate reliable source data required to accurately report to federal/state taxing jurisdictions. Manage federal/state compliance including year-end reporting, print/ distribution support, as well as taxpayer identification number matching and B-Notice response to confirm federal/state compliance. Tax audit support available as needed. Provide high level information on federal/ state form types and purposes, as well as assist client s customers with general inquiries related to information statements received. Outcome An efficient onboarding process that results in a complete and accurate record of federal/state documentation. Reduce administrative burden and increase regulatory compliance by providing reconciliation support. Outsourcing federal/ state call center activities reduces administrative burden. Work product Deliver statistical reporting at client s request. Co-develop on-demand federal/state filing and reporting options. Offerings include, but are not limited to, reprinting services and vendor/ customer assistance hotline. Employment Tax Advisory Services 5

6 Why Ernst & Young LLP s Tax Advisory Services? With Congress and the Administration looking for ways to protect and add to revenues without raising taxes or expanding the tax base, regulators are focusing on information reporting and withholding at the federal and state level as effective tools to accomplish those goals and close the tax gap. What are the implications to your business? Increased reporting requirement Expanded range of risk and exposure These changes are complex and impact the enterprise from operations and human resources to finance and accounting. How we help across the business enterprise Our Information Reporting and Withholding Services (IR&W) bring together a multi-disciplined team of professionals to meet the needs of companies from initial assessments to controversy and remediation. Our team of tax technical, business process and IT professionals can help effectively and efficiently implement, monitor and remediate IR&W issues across the business enterprise. We can help companies like yours understand the demands of this new landscape, the investments required to meet them and the impact IR&W will have on the way you do business. Need for state and federal compliance While some states follow the federal IR&W requirements, many have separate rules that require special consideration when planning IR&W processes. Our team of specialists is uniquely prepared to confirm your company is adhering to all state and federal regulations. We work closely with our federal information reporting and withholding team for efficiency and appropriate federal calibration. 6 State Information Reporting and Withholding Services

7 Employment Tax Advisory Services 7

8 State Information Reporting and Withholding Services Comprehensive services, professionally delivered Employment tax Tax Human Resources Benefiits and unemployment claims Federal, state and local filing Original filings Correction filings Recipient forms Bulk print and distribution (print vendor) Federal efiling Form 1099 Series and Form 1042 Series Work Opportunity Tax Credit and more Hiring tax credits Workforce Advisory Services Affordable Care Act Reporting and compliance Supporting you through the employment life cycle Working together with you Balancing reports Data review and compliance checks Secure web-based data storage accessible over the internet Online real time review and corrections Prior-year data retained and accessible Integrated B-notice compliance Interactive name/taxpayer Identification Number (TIN) matching Contact us at Connect with us Follow us on Follow us on Join us on Perspectives from EY Bulk name/tin matching files for submission to IRS TIN masking on recipient forms Standard and custom reports Bulk import form detail records Withholding management estatement and econsent Contact us for more information: Kristie Lowery Julie Gilroy Stephanie Swann Raymond Grove EY Assurance Tax Transactions Advisory About EY EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities. EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com. Ernst & Young LLP is a client-serving member firm of Ernst & Young Global Limited operating in the US Ernst & Young LLP. All Rights Reserved. SCORE No US CSG No ED None This material has been prepared for general informational purposes only and is not intended to be relied upon as accounting, tax or other professional advice. Please refer to your advisors for specific advice. ey.com