Sovos and Comply Exchange Partner to Offer First End-to-End Tax Information Reporting and Withholding Offering

New partnership allows organizations to remain compliant with tax documentation collection and validation, withholding rate calculations and compliance, and year-end tax information reporting

Sovos and Comply Exchange announced their partnership as the first and only end-to-end tax information reporting and withholding offering on the market. With over 42 years of combined experience, Sovos and Comply Exchange have closely integrated two best-in-class solutions to mitigate the risk and liability associated with noncompliance, reduce costs and effort, and automate withholding and reporting processes from start to finish.

Improper tax documentation collection and validation processes often lead to incorrect information, such as names and TINs, being reported on tax forms and incorrect withholding tax calculations. This inevitably prompts audits and penalties. According to a Treasury Inspector General for Tax Administration (TIGTA) report released in May 2021, $13.3 billion was not collected through backup withholding due to missing or incorrect information being reported through the tax information reporting process. With regulatory agencies intent on closing tax gaps, organizations must set up robust and compliant tax documentation processes so information reported through the tax information reporting process is accurate and businesses can avoid costly penalties and audits.

“This is a monumental step forward for our customers,” said Wendy Walker, solution principal, Sovos. “With this partnership, Sovos offers the most complete solution and can help organizations maintain compliance with tax documentation and collection, lower costs and automate their entire withholding and reporting processes.”

“With ever-evolving regulations and an ongoing emphasis on data security, it is increasingly challenging for businesses to become and remain compliant,” said Jessica Metts, director of client services, Comply Exchange. “This partnership will bring a first-to-market solution that will help individuals and businesses alike improve operational efficiencies and mitigate risk from start to finish.”

With Sovos and Comply Exchange’s partnership available through Sovos, customers can expect solutions that include:

Automated collection, validation and management of Forms W-8, W-9 and more

Collection of paper or electronic W-8s, W-9s, 8233 and self-certifications

Validation of tax documents, ensuring accuracy and compliance, including real-time TIN and GIIN validations

Ongoing management and validation of tax documents as changes in circumstances or expiration require forms to be replaced

Accuracy in withholding rate calculations and compliance

Calculation of correct withholding rates based on tax documentation provided by payee and IRS requirements

Automation of tax withholding payments and return filings for federal, state and local jurisdictions, where possible

Electronic reconciliation of withholding tax liabilities compared to amounts reported on individual tax forms

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