Regulatory changes happen. More often than you might think. Monitoring regulatory changes is time consuming, but it’s critically important as an employer that you stay on top of these changes and ensure you are using the most current tax forms to capture your employees’ tax information. Failure to capture the correct information can lead to time-consuming audits and costly penalties.
The Perils of Losing Sight of Tax Form Changes for Companies
Regulatory changes happen. More often than you might think. In fact, our team at CIC Plus has already updated more than 65 tax forms – no, that’s not a typo – for the U.S. and Canada for 2016.
Monitoring regulatory changes is time consuming, but it’s critically important as an employer that you stay on top of these changes and ensure you are using the most current tax forms to capture your employees’ tax information.
What happens if you don’t? Failure to capture the correct information can lead to time-consuming audits and costly penalties.
Case in point: The Indiana Department of Revenue recently ruled that a Marion County employer who failed to obtain a completed form (Form WH-4, Employee’s Withholding Exemption and County Status Certificate) from three employees owed additional withholding tax based on the Marion County resident tax rate. The employer argued that the additional tax should have been computed at the lower nonresident tax rate since the employer didn’t know the employees’ counties of residence. The Indiana Department of Revenue disagreed because Indiana law requires an employer to obtain this information. The employer was also assessed a ten percent negligence penalty for failing to obtain Form WH-4 from the employees.
So what’s the bottom line? As an employer you need to be diligently monitoring these changing regulations on the state and local levels to avoid facing serious penalties. The issue in Indiana was completely avoidable.
To make sure you don’t find yourself facing avoidable penalties, establish a subject-matter expert or team to actively monitor all potential tax form changes and make sure your employees complete the right forms, on time. Not an easy task, especially since it distracts you from other business priorities. That’s why many companies leverage CIC Plus to manage all of the complexities associated with W-4 compliance. We monitor all regulatory developments and automatically update the required tax forms. We ensure that your employees complete the right forms by using automated address validation to present all required tax forms. Our intelligent-based forms also guide employees to provide the correct information, ensuring that the right data is collected the first time and on time.
Whether you handle it internally or you seek the help of an expert like CIC Plus to handle it for you, staying current on regulatory changes is critical to maintaining compliance and avoiding costly fees.