Just the News Taxpayers Wanted to Hear: The IRS is Set to Grow in 2013
Here’s a bit of good news for anyone who LOVES the IRS and just wants to have more of it in their lives: the IRS is hiring agents, and is expected to conduct more audits than ever in 2013. Small business owners are at particular risk, according to an article published by OnWallStreet.com:
The IRS is beefing up its ranks of auditors, and doing more audits, according to a leading accountant addressing the Financial Planning Association of New York’s spring forum.
“With everybody losing jobs, the biggest hire is the taxing authorities. They are hiring left and right to do audits,” said Mark Josephson, partner at New York City-based Murray & Josephson. “Contrary to what you might be reading in the press, when I speak to an auditor, and they say, ‘Yeah we just hired 31 people in our department,’” he said.
He added that as the IRS is auditing more taxpayers, including small business owners, the audits are taking longer because the agents are demanding more details. He said on every audit he’s seen recently, agents have demanded every brokerage statement, every bank statement, and any other type of financial statement. He noted that they always had a right to demand this documentation, but only asked for it occasionally in the past. “One of the main reasons is they want to add up all the deposits and make sure you’re picking up all your income. The audits are becoming more and more tedious,” he said.
At a recent financial forum Martin Murray, Josephson’s business partner, highlighted one particular new disclosure requirement that is getting extra scrutiny: small businesses must disclose if they were required to issue 1099 forms to outside contractors, and then disclose whether they did or not. He said many do not want to bother with the extra chore and expense of issuing these forms, and skip it. If the small business owner then declares on her taxes that she was not required to issue 1099 forms, and she should have, it’s perjury, he said. At that point, the client is facing both penalties and possible criminal charges.
Got all that? In 2013, taxpayers and business owners can look forward to more IRS agents, more audits, and possibly criminal charges. If you’d like to learn more or if you are currently dealing with an IRS dispute and need help getting the IRS off your back, please get in touch with us today!