Monday, October 31, 2005

The Paperless IRS!!

Is The IRS Going Paperless?!?!

As I read thru the Fall 2005 SSA/IRS Reporter newsletter I can not help but noticed almost every article has something to do with the new initiatives both offices are taking to stay ahead of the technological curve. The main story on the front deals with the new Social Security Number Verification Service (SSVS) that allows employers to go online and match employees with their social security numbers before filing W-2 forms. This provides the company the added benefit of due diligence so that additional processing costs will not be incurred for mistakes.

As I read on, another story deals with the new 2006 filing regulations for large corporations (gross assets of 50 million and file 250 returns a year) making it a requirement to file returns electronically. This may be problematic for corporations initially (increased transition costs to conform to the new electronic system), but something corporations must deal with for the 2006 filing. Over time I am sure that corporations will realize better efficiency and scaled economies with the transfer to electronic filing. Another article states that the IRS is now accepting fax signatures on employment tax returns making it easier for businesses to file and submit returns.

The SSA follows suit with an article announcing that magnetic tape will not be allowed in tax year 2006 for W-2 filing. All W-2 forms must be filed online via their secure online suite. One of the more interesting articles I thought was the new EFTPS (Electronic Federal Tax Payment System) batch software that is in development. With the new software tax professionals can send up to 1000 enrollments and 5000 payments in one transmission making our lives a bit easier. I can’t wait for that.

One thing a small business owner can not wait for is to take a practical look at their business operations and see of there are ways to cut costs by going paperless. From paperless filing, and data storage to paperless engagements for service businesses many paperless options can be purchased at a small cost and implemented quickly. Paperless environments also make your daily operations move more efficiently and effectively. A small investment in technology may make a large impact on the bottom line.

Brian N. Stovall
Consultant - Accounting and Busiess Advisory
The Brico Group, Inc.

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