In this issue: New health care reform includes current and future tax changes HIRE Act of 2010: Tax breaks for businesses Taxes & summer jobs The question of the year: Should you convert your regular IRA to a Roth? Two prior IRA rules are still in effect for 2010 Working after retirement can change your benefits and your tax bill Mark Your Calendar Tax Talk

IRS audit activity

A three-year random audit program started by the IRS in 2007 will now be continued indefinitely. These random audits of individual tax returns are used by the IRS to collect noncompliance data for adjusting general audit formulas and updating tax gap estimates.

Tax returns claiming the homebuyer tax credit are another audit target. The IRS expects to open 200,000 audits by the end of 2010 to address potential fraud in claiming the homebuyer credit. The Service will also be monitoring the recapture of the credit by checking public databases of real estate sales. Generally, those who sell a home within three years of taking the tax credit must pay it back.

New hire Form W-11

Employers may qualify for an exemption from social security payroll taxes on qualified workers hired after February 3, 2010, and before January 1, 2011.

The IRS has released Form W-11 to be used to verify worker eligibility for this tax exemption. The form is to be filled out by the new hire, certifying under penalty of perjury that he or she was either unemployed or worked less than a total of 40 hours during the 60 days prior to taking the current job. The W-11 forms are not to be filed with the IRS, but rather retained in the employer's payroll records.

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