IRS Encourages Self-Assessment to Identify Fringe Benefit Errors

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August 3, 2017

As much as I love tax law, filling out another tax form isn’t high on my list of fun things to do.  So when the IRS issues a form that isn’t legally required to complete, should you?  If you are an employer that provides one or more fringe benefits to your employees, you may want to put IRS Form 14581-A on your bucket list.  Here’s a link to the Form.  https://www.irs.gov/pub/irs-pdf/f14581a.pdf

Form 14581-A is titled “Fringe Benefits Compliance Self-Assessment for Public Employers,” and the purpose of it is to help governmental entities test their compliance with income tax laws with respect to fringe benefits provided to employees.  Through a series of eleven yes or no questions, the Form seeks to identify whether the employer is correctly withholding from, and reporting on, employee reimbursements relating to things like employer-provided meals, lodging, and gift certificates.  The Form includes a discussion of the IRS rules on such reimbursements and when they are (or are not) includable in wages subject to withholding.  For example, one question asks whether the employer includes the taxable amount of employer-provided meals as wages when applicable, and notes that meals may be excludable from income in two cases, “de minimis meals” and meals for the convenience of the employer provided on the business premises.

While the form specifically references public employers, the vast majority of the rules referenced in the Form are also applicable to private sector employers.  So, everyone jump in the pool and take the Form 14581-A self-assessment today!

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