IRS Has Another Way To Levy

You may know that – if you fall behind on your taxes – the IRS may draft your bank account or garnish your wages. These actions are called “levies.”

The IRS has a new revenue source to levy.

If you sell on eBay or Amazon, or accept PayPal, you may have received a Form 1099-K. The 1099-K reports monies paid to you, if you exceed a certain dollar or number-of-transactions threshold.

There are new instructions to IRS revenue officers.

1.      They now have another address at which to contact you, should you have moved and disappeared from their radar.

2.      They now can levy those eBay, Amazon or PayPal payments, if you owe the IRS money and have not entered into a payment plan. They will levy future payments until the taxes are fully paid.

The 1099-K is joining the long-established levy program on W-2s and bank accounts. The levy program on 1099-Miscellaneous (that is, independent contractor) income has also been around for a while.

2013 W-2 Reporting For Larger Employers

I was reminded that there is new W-2 reporting for larger employers this year.

If you will be issuing more than 250 Forms W-2 this month, please remember that you have to include and report the cost of employer-sponsored health insurance provided to the employee during 2012.

Smaller employers are exempt from this requirement for the 2012 W-2s.

The IRS wants taxpayers to know that this reporting is just “informational.” The amount paid is not taxable to the employee for 2012.

COMMENT: Call me a cynic, but why do I believe that the key word in the above sentence is “2012?”

Now It's Social Security Notices Concerning W-2s

The Social Security Administration is resuming their DECOR notice program. DECOR stands for “Decentralized Correspondence” and means that the SSA could not process a Form W-2. There is any number of reasons why this could happen, including:

1. Typographical errors
2. Name changes, including marriage
3. Misuse of a social security number

The SSA places these earnings in a suspense file called Earnings Suspense File (ESF) rather than posting to a worker’s account.

An employer is requested to check their records. If the worker is still employed, the employer may be requested to verify the employee’s social security card and number. If the employer and employee are unable to resolve the matter, the employee will be requested to contact a local SSA office. If the worker is no longer employed, the employer is required to document its efforts to verify the information.

You may remember that SSA has not sent out DECOR notices for several years because of litigation over Department of Homeland Security regulations.