Working with the IRS in Today's World
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Today’s world is digital. Everywhere you go now, that person/entity wants you to set up an account online. It is annoying but in many cases, it is necessary and the best way to work with that entity. One of those entities is the Internal Revenue Service (IRS). The IRS is moving to a more digital platform. With the reduction of employees, digital will allow a person to make direct payment of any balance due, see payment history and respond to any notices without waiting on the phone for multiple minutes or hours to talk to someone, who may or may not be fully trained to handle your issue. Issues can be resolved quicker, with less stress.
You can set up an individual account with the IRS which will allow you to see the information that the IRS has on you, allows you to make payments, see payment history, create payment plans, request account transcripts, and authorize tax professionals to work with the IRS on your behalf. To learn more about this account, go to Online account for individuals | Internal Revenue Service.
You also work with the website ID Me. This site verifies your identity with the government. This is a very important issue (identity) that you must do to set up your IRS account. Not only is this account used by the IRS, it used by the Social Security Administration (SSA) so if you register with SSA you can use an existing ID ME account.
We are encouraging all of our clients to set up an account with IRS. This will allow us to request online power of attorney authorization from the client when we have to work with the IRS on the client’s behalf.
For those clients with business accounts, you can also set up a business account with the IRS. To learn more about this account go to Business tax account | Internal Revenue Service. Again, we are highly encouraging our business clients to set up one of these accounts.
To be better prepared to deal with possible future problems and see what your current status is with IRS and SSA, you need to set up these accounts and share them with us.
Why Growth Increases Employment Risk A business with two employees may feel easy to manage. A business with ten employees needs more structure. A business with twenty employees needs even more consistency. Growth creates more decisions. More decisions create more chances for confusion, conflict, or claims. As a business grows, employment practices can lag behind. The company may add people before updating job descriptions. It may promote a team member into management before training them. It may handle performance issues differently from one employee to another. These gaps are common. They do not always mean the owner is careless. They often mean the business is busy. But employment claims often focus on process. For example: Was the rule applied the same way for everyone? Was the employee warned? Was the complaint reviewed? Was the hiring process fair? Was the manager trained? Was the decision documented? A clear process is easier to defend than memory. The Equal Employment Opportunty Commission advises employers to train managers and employees on equal employment opportunity laws, establish neutral and objective criteria for employment decisions, and monitor practices for consistency. It also recommends fostering open communication and early dispute resolution to keep small issues from becoming legal claims. [4] That is why Employment Practices Liability Insurance works best when it is paired with good workplace habits. Insurance helps protect the business financially. Documentation helps explain what happened. How Small Businesses Can Reduce EPLI Risk Employment Practices Liability Insurance is one layer of protection. Strong employment practices are another. Small businesses can reduce risk by making workplace decisions more consistent. This does not require a large HR department. It does require a simple system. Start with these steps: Use written job descriptions. Create a basic employee handbook. Document performance concerns. Use consistent interview questions. Keep hiring notes professional and job-related. Train managers on harassment, discrimination, and retaliation. Respond to employee complaints promptly. Apply workplace policies consistently. Review termination decisions before acting. Keep payroll and worker classification practices current. These steps help create a better workplace. They also help the business if a claim appears later. The EEOC offers a Small Business Resource Center with free guidance on hiring, training, evaluating, disciplining, and terminating employees. The agency notes that small business owners often do not have legal or HR experts on staff, and the resources are designed to help fill that gap. [5] Owners should be especially careful with terminations. A termination may be valid, but it should still be documented. The business should be able to explain why the decision was made and show that similar situations were handled in a similar way. Good records do not remove all risk. They make the business more prepared.
What EPLI Is Not Employment Practices Liability Insurance is not the same as general liability insurance. General liability usually focuses on third-party bodily injury, property damage, and certain personal injury claims. For example, it may apply if a customer slips and falls at your office. EPLI is different. It focuses on workplace claims. Employment Practices Liability Insurance is also not the same as workers' compensation. Workers' compensation helps cover employees who are injured or become ill because of their work. EPLI helps with certain claims about how employees or applicants were treated. That distinction matters. Many owners assume their business insurance will cover an employee lawsuit. It may not. A claim involving wrongful termination, discrimination, harassment, or retaliation may fall outside general liability or workers' compensation. EPLI is designed to help fill that gap. EPLI also has limits. The Insurance Information Institute notes that EPLI policies may reimburse companies for defense costs, settlements, and judgments. But they generally do not cover punitive damages or civil or criminal fines. [1] Common exclusions may include: Criminal acts Intentional wrongdoing Bodily injury Property damage Workers' compensation claims Certain wage and hour claims Claims known before the policy began Some contract disputes Wage and hour claims deserve extra attention. Some policies exclude them. Others may offer limited defense coverage or an endorsement. The best question is not, "Do we have EPLI?" The better question is, "What does our Employment Practices Liability Insurance actually cover?"
What Employment Practices Liability Insurance Covers Employment Practices Liability Insurance is built around the employment relationship. It may help cover legal defense costs, settlements, or judgments tied to covered workplace claims. A policy may respond to claims involving: Wrongful termination Discrimination Sexual harassment Retaliation Failure to hire Failure to promote Wrongful discipline Negligent evaluation Employment-related defamation Invasion of privacy The International Risk Management Institute identifies wrongful termination, discrimination, sexual harassment, and retaliation as common EPLI claim types. It also notes that policies may cover other employment-related conduct, such as defamation, invasion of privacy, failure to promote, and negligent evaluation. [3] Here is a simple example. An employee is fired after repeated performance issues. The owner knows the decision was based on the work. But the former employee claims the firing was discriminatory or retaliatory. Even if the business did nothing wrong, it may still need to respond. That could mean attorney fees, agency filings, a demand letter, or a lawsuit. That is one of the most important parts of EPLI. A claim does not have to be successful to be expensive. IRMI notes that EPLI policies contain shrinking limits provisions. That means defense costs, which are often a substantial part of a claim, reduce the policy's available limits. [3] Some EPLI policies also cover claims from job applicants. This matters if someone says they were not hired because of age, disability, pregnancy, race, gender, religion, or another protected category. Some policies include third-party coverage too. This may help if a customer, client, or vendor claims harassment or discrimination by someone at the business. Not every policy includes it, so owners should ask.