San Francisco Tax Preparation / CPA: GAO: Tax Compliance Challenges Confront Platform Workers

Filed in CCH NEWS FEED by on August 11, 2020

According to a report released by the Government Accountability Office (GAO), various tax compliance challenges confront “platform workers” who often lack access to information about their earnings. Among other things, the report examined what is known about the platform workforce, and options to promote compliance among its workers.

Platform Economy
The platform economy is an arrangement where workers offering goods or services connect with customers through an app or other online platform. Estimates of the population of platform workers lack certainty, but generally range from around 1.5 million to 2 million workers for recent years, and suggest that the platform workforce may be growing. According to stakeholders such as researchers and tax preparers, platform workers may not realize that a company is treating them as independent contractors rather than as employees, and that they must comply with different tax requirements.

Information Reporting
The GAO advanced several recommendations to the IRS, including actions to (1) enhance the Service’s communications plan; (2) increase information reporting for platform workers; and (3) allow voluntary withholding. The IRS agreed with the recommendation to enhance its communications plan. For four recommendations related to information reporting and voluntary withholding, the IRS either disagreed or said it was unable to agree because it could not commit to an implementation date due to higher priorities.

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