IRS to Small Businesses: We’re Coming for You
As if small business owners didn’t already spend enough time dealing with the IRS and their complicated tax code, the agency has recently announced that they will be broadening their focus and targeting a growing number of small businesses.
As Bloomberg News reports:
The Internal Revenue Service is shifting its small-business audit focus from corporations to various types of partnerships as those entities have grown more prevalent and complex, according to an agency official.
Examining the returns from partnerships and other so-called pass-throughs will be the “top priority” of the IRS’s Small Business/Self-Employed Division over the next year and beyond, said Faris Fink, the head of the office. As part of that shift, more and better training of IRS agents is needed, Fink said at the American Institute of CPAs National Tax Conference last week in Washington, Bloomberg BNA reported.
“The Service has for a long time focused its energy on corporations,” he said. “Frankly, we’re a little bit behind the curve in getting around to developing a partnership strategy.”
Pass-throughs, which include S corporations and sole proprietorships, are businesses that don’t pay income taxes directly. Instead, their income is passed through to their owners who pay taxes on it on their individual returns. Pass-throughs comprise almost 95 percent of all U.S. business entities, according to IRS statistics.
In other words, if your business is structured as an S-corporation, a partnership, or a sole proprietorship… the IRS is coming for you.
This is certainly not news that most business owners will be excited to hear. However, there is good news. First of all, despite additional IRS attention, business owners who follow best practices when it comes to their accounting and tax reporting will have nothing to worry about. And secondly, should your business run into trouble with the IRS… we are here to help! We’ll handle the IRS so that you can focus on running your business and living your life.
If you’d like to learn more, or if you need immediate help with an IRS problem, please contact us today!