IRS Puts Magnifying Glass on Fringe Benefits in Audits

The release of the IRS’s Executive Compensation — Fringe Benefits Audit Techniques Guide reveals the Service’s game plan for looking at the often contentious area of employee fringe benefits and how they are treated for tax purposes. Sports tickets, luxury boxes in sporting venues, company credit cards, corporate aircraft and various other fringe benefits are the kinds of perks offered to top executives that are sure to merit close attention by IRS field agents during an audit. In this newly released guide, the IRS provides many warnings to its auditors about how corporations will try to hide such items under expenses when they should be classified as compensation taxable to the employee. CCH’s Federal Tax Course Letter recently took a close look at this new audit guide and provided practitioners with advice on what is in the IRS guide and what it means in terms of looking at current benefit plans and planning for future benefit plans.

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This story is from the CCH’s monthly Focus on Tax newsletter, which provides advise and guidance on federal and state tax issues for tax and accounting professionals.

Read this article from CCH’s Journal of Taxation of Financial Products.

AUTHOR

Wolters Kluwer Tax and Accounting

Wolters Kluwer Tax and Accounting is a leading provider of software solutions and local expertise that helps tax, accounting, and audit professionals research and navigate complex regulations, comply with legislation, manage their businesses and advise clients with speed, accuracy and efficiency. Wolters Kluwer Tax and Accounting is part of Wolters Kluwer N.V. (AEX: WKL), a global leader in information services and solutions for professionals in the health, tax and accounting, risk and compliance, finance and legal sectors. We help our customers make critical decisions every day by providing expert solutions that combine deep domain knowledge with specialized technology and services. Wolters Kluwer reported 2016 annual revenues of €4.3 billion. The company, headquartered in Alphen aan den Rijn, the Netherlands, serves customers in over 180 countries, maintains operations in over 40 countries and employs 19,000 people worldwide. Wolters Kluwer shares are listed on Euronext Amsterdam (WKL) and are included in the AEX and Euronext 100 indices. Wolters Kluwer has a sponsored Level 1 American Depositary Receipt program. The ADRs are traded on the over-the-counter market in the U.S. (WTKWY).

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