IRS to Cross-Reference K-1 Information
We all know the IRS cross-references information between W-2 forms and 1099 forms and the tax returns of the recipients. If there is a discrepancy between what the recipient reports on his tax return and the amount on the official form, a correspondence is initiated in which the IRS attempts to straighten out the matter.
The IRS has not attempted any such cross reference with K-1 forms, those forms that show your share of ownership in a partnership, trust, or s corporation. Until now. The IRS is ready to start comparing information on the K-1 forms to amounts listed on individual tax returns. The K-1 will be treated just like a W-2 or a 1099 form.
As a result of this new program, all taxpayers and tax practitioners should be warned to pay extra close attention to these forms this year and in the future.
Voice of the Editor
Which isn’t completely true. I mean, occasionally I drop by when I manage to sneak out of the nonstop frat party over at Going Concern, but I’m mostly a wallflower over there. I’m happy to say that I’ve been given express permission (or explicit orders, if you like) to wander over here to AccountingWEB more often.
Why is that, you might ask? My job is to replace the irreplaceable Gail Perry as Editor-in-Chief. What does that mean? I don’t really know! I think it’ll be fun getting a feel for things, throwing in my own thoughts here and there, and listening to the discussions you’re having about the accounting profession.