Expansion of the Gig Economy Warrants Focus on Improving Self-Employment Tax Compliance

The Commissioner, Small Business/Self-Employed (SB/SE) Division, should adopt more uniform processes for the notice review that include capturing additional details beyond the error code, a revised process for selecting and ensuring that the notice reviewers are qualified tax examiners, and oversight of the notice review cases when no error is identified.

The Commissioner, Small Business/Self-Employed (SB/SE) Division, should begin overseeing the notice review process to ensure that campuses are creating and implementing corrective actions to address notice errors and monitoring whether those corrective actions reduce each campus's error rate.

The Commissioner, Small Business/Self-Employed (SB/SE) Division, should require managers and leads to vary when they select cases for the EQRS review so that the employees they are evaluating cannot anticipate when the review will occur.

The Commissioner, Small Business/Self-Employed (SB/SE) Division, should using the tax examiner's existing authority as described in the position description to determine the acceptability of taxpayers' explanations, change guidance that currently requires examiners to accept many taxpayer explanations and allow tax examiners to assess the credibility of taxpayer responses, especially in the cases of suspicious expenses or taxpayers claiming information returns are fake or that the income belongs to another taxpayer.

The IRS Chief Counsel should develop and issue guidance on how taxpayers should classify themselves under I.R.C. Section 6050W.