BY STEVE GRAFF
Officials from the Guam Department of Revenue and Taxation told the Journal that the recently announced Internal Revenue Service “campaign” audits to recoup unpaid self-employment taxes on Guam will start in 2020, and that the department would be coordinating closely with the IRS to help in the process.
It’s not clear how many people would be audited, or if and how many IRS agents would be sent to Guam.
Rev&Tax was informed about the tax campaign in August 2019, said Lawrence Terlaje, administrator for Rev&Tax’s taxpayer service division. These types of outreach efforts, even prior to these newer campaigns, have historically been coordinated with Rev&Tax.
“On a regular basis, the IRS does these types of campaign work to identify areas…” said Dafne M. Shimizu, director of Rev&Tax. “They work with our collections team assisting to identify and help IRA agents locate taxpayers locally.”
She added, “We are in constant communication with [the IRS].”
A story in the Dec. 23 issue of the Journal reported on the Dec. 2 IRS announcement of two self-employment campaigns focusing on Guam and other U.S. territories. Local tax experts interviewed hadn’t heard of the latest campaigns, but they were aware of past coordinated auditing efforts by the IRS.
Self-employed residents on Guam are subject to file a 1040 form and a pay self-employment tax to the IRS, not the government of Guam. It amounts to 15.3% of total earned wages — which represents what both an employee and employer would pay in social security and Medicare taxes.
The number of people on Guam who haven’t paid or underpaid their self-employment taxes wasn’t immediately available. However, a coordinated effort by the IRS suggests enough money is being held up that’s deserving of the agency’s attention.
“The enforcement side of these campaigns is important,” Shimizu said. “They let people know they mean business.”
To identify delinquent taxpayers, the IRS is likely running its own reports, Shimizu added, and looking at people who filed in previous years but not recently, for example.
The agency can also lean on Rev&Tax to fill in any blanks. While the IRS and Guam filings are separate, information on each, including for self-employed filings, can provide information about another to determine parts of or all a person’s tax standing.
“I know this much,” Terlaje said. “We do have a certain agreement with the IRS where we can share information. And at one point, it might trigger their need to come out.”
While tax refunds typically dominate headlines and the public’s attention, collections are Rev&Tax’s primary charge. Coordinating with the IRS to help collect taxes owed to that agency falls under its purview, as well.
“We are the front line here with regard to taxes, even with IRS notices,” Shimizu said.
Rev&Tax also looks to the IRS for specialized training of its personnel.
For the first time in 20 years, four employees recently completed a three-month federal law enforcement training under the IRS criminal investigation branch in Washington, D.C., Shimizu said.
Rev&Tax also hosted two IRS trainers in November for more than three weeks to train and update teams on the collections process.
Shimizu previously discussed the plans for these two trainings in the June 24, 2019, issue of the Journal.
“We have developed a pretty good rapport through the years [with the IRS],” she said. “In one year, we have had two significant trainings. It speaks to our relationship and commitment to get our people the technical expertise and knowledge that they need.” mbj