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.


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