IRS RESPONSE TO RECOMMENDATION: Significant resources are readily available to taxpayers participating in the sharing economy. Participants in the sharing economy follow the same general guidance provided for all businesses, employees, and independent contractors to help them understand and meet their tax obligations for their individual situations. We will continue to provide updates on IRS.gov as well as through outreach efforts to address any specific issues or trends identified with the sharing economy.

CORRECTIVE ACTION: N/A

TAS RESPONSE: The National Taxpayer Advocate understands that participants in the sharing economy must follow the same framework of rules as traditional taxpayers. However, we believe that due to inexperience with the tax system and the overwhelming volume of tax guidance from the IRS, it will be beneficial for sharing economy participants who want to comply to have as a starting point a dedicated IRS publication that addresses the basic issues, including those the IRS identified above. This new publication for sharing economy participants need not be long and all-encompassing, but it should at a minimum provide a checklist of issues that first-time, self-employed persons participating in the sharing economy should be aware of, and explain the practical impact of these issues.

We fully expect the IRS to continue to use the irs.gov web site to reach this target group. In no way are we suggesting that the creation of a sharing economy publication take the place of the Sharing Economy Tax Center on its website, but to consolidate and supplement it.

ADOPTED, PARTIALLY ADOPTED or NOT ADOPTED: Not Adopted

OPEN or CLOSED: Closed

DUE DATE FOR ACTION (if left open): N/A

IRS RESPONSE TO RECOMMENDATION: ​​The Shared Economy Tax Center contains a wealth of information, including links to available resources for those participating in the sharing economy industry.

CORRECTIVE ACTION: N/A

TAS RESPONSE: As noted above, the National Taxpayer Advocate sees a benefit to the IRS creating a formal publication that pulls together many of the common tax issues potentially encountered by participants of a sharing economy. As a companion to this publication, we believe that the IRS should create a one-page brochure that contains some quick-hit issue-spotting, along with a link to the Sharing Economy Tax Center web page. The existence of one should not preclude the IRS from developing the other.

Because the IRS does not agree to publish such a brochure, TAS will create and publish such a brochure as part of its Consumer Tax Tips series, and we will ourselves work with large service coordinators so they can distribute it to their participants.

ADOPTED, PARTIALLY ADOPTED or NOT ADOPTED: Not Adopted

OPEN or CLOSED: Closed

DUE DATE FOR ACTION (if left open): N/A

IRS RESPONSE TO RECOMMENDATION: ​The Internal Revenue Code does not give IRS the authority to require a taxpayer to provide IRS publications to a third party. In addition, the IRS does not believe the benefits of such a requirement would outweigh the burden on taxpayers. Nor would there be a mechanism for IRS to monitor compliance. However, as mentioned above, we continue to build two-way relationships with sharing economy organizations and taxpayers, and provide them with tailored educational materials addressing topics such as estimated taxes and tax fraud prevention.

CORRECTIVE ACTION: N/A

TAS RESPONSE: This recommendation is moot, as the IRS has not agreed to develop a one-page brochure on the sharing economy.

As noted above, TAS will create and publish such a brochure as part of its Consumer Tax Tips series. Because it will be in electronic format, it will be easy for service coordinators to make this info readily available. We will also make it available on the TAS webpage.

ADOPTED, PARTIALLY ADOPTED or NOT ADOPTED: Not Adopted

OPEN or CLOSED: Closed

DUE DATE FOR ACTION (if left open): N/A

IRS RESPONSE TO RECOMMENDATION: Resources are readily available on IRS.gov to assist taxpayers on a variety of tax topics related to filing requirements, starting a new business, the distinction between employees and independent contractors, and paying taxes. In addition, online tools, such as mileage log apps and estimated tax payment calculators, are already generally available to the public to assist taxpayers with determining income and expenses and general recordkeeping.

CORRECTIVE ACTION: N/A

TAS RESPONSE: In the near future, some taxpayers will start using irs.gov as an online portal to the agency. (Sharing economy participants are more likely to be adept online users.) Forrester Research found that although people generally do not use government online services, there is one type of online tool they find particularly helpful — an online “wizard.” The IRS should provide an online wizard that walks them through each step of the process to understand and meet their tax compliance obligations. The use of an online wizard will help taxpayers navigate through the wealth of information the IRS posts on its website.

ADOPTED, PARTIALLY ADOPTED or NOT ADOPTED: Not Adopted

OPEN or CLOSED: Closed

DUE DATE FOR ACTION (if left open): N/A

IRS RESPONSE TO RECOMMENDATION: ​​The IRS has participated in online forums including a web conference in February 2017 discussing on-demand workers, independent contractors, and self-employed and independent business owners. More than 76,000 participated in two sessions. We continue to share information on various tax topics with taxpayers through outreach opportunities such as the annual tax forums and industry meetings.

CORRECTIVE ACTION: N/A

TAS RESPONSE: The National Taxpayer Advocate is pleased to learn of the IRS’s recent participation in a widely-attended web conference. Embracing new ways to reach taxpayers is forward-thinking. The IRS should evaluate the pros and cons of having an official presence in online forums, where it can help shape the discussion of tax issues impacting the sharing economy. This is the 21st century and the IRS should explore new modes of direct communication with its taxpayers.

ADOPTED, PARTIALLY ADOPTED or NOT ADOPTED: Partially Adopted

OPEN or CLOSED: Closed

DUE DATE FOR ACTION (if left open): N/A