How Small Business Owners
Can Protect Themselves From the IRS -
Guaranteed
Dear Overtaxed, Hard-Working Business
Owner:
Can an IRS agent actually throw the
book at you for a simple BOOKKEEPING mistake? Well, I'm
afraid the answer is YES - even if they catch just a
little decimal point error you did NOT mean to do.
There's no question - IRS audits can be TIME
CONSUMING!
But that's NOT the worst
part!
They are not only TIME CONSUMING; they are COSTLY. The IRS can
levy on wages, ruin your credit, get your records by force if
necessary, seize assets, and even sell your home. Last but not
least they can throw you in
Jail!
REMEMBER THIS IS THE AGENCY THAT
SENT AL CAPONE TO JAIL WHEN NO ONE ELSE
COULD!
And you can rest assured no IRS agent
is gonna show up on your door step offering to give you
an extra check for the tax refund money you didn't know
how to claim. (But
if you owe THEM money now that's a different story.
They'll be on you like white on
rice!)
Oh, and just for the record, I was at
the IRS annual conference in Las Vegas, where the head
honchos from the IRS said, "THE SMALL BUSINESS IS OUR
LARGEST AUDIT GROUP".
Why would the IRS want to go after you
the small man on the block? The IRS believes their
biggest compliance (Deadbeat companies not paying their
fair share) issue is with the small
business.
But, how
does the IRS know who they are going to pick for an audit?
Do they roll the dice or do they let a monkey throw darts at
a list of names? The IRS computers have a check system named
"DIF" short for Discriminate Function System. The computer
system scores the tax return you file and
assigns points
according to DIF criteria. The DIF criteria is as
secret as our Nuclear Command Strike Codes, but
we can make educated guesses because it is intended to
make the IRS money.
The 6 Things Most Small Business's
Can do to Keep The IRS Off Their
Back:
1. KNOW WHAT THE
IRS THINKS ABOUT YOUR
INDUSTRY! The IRS has written Industry
Specialization programs which tell their field auditor how
to deal with each specific industry. These read like a stock
offering prospectus. Very dry and tough to understand.
(*WARNING: Small Businesses claiming
deductions which are more than the industry standard might
as well waive a flag asking the IRS to audit
them.)
2. REPORT INCOME
YOU EARN FROM THIRD-PARTY
PAYERS! A
lot of people do not keep records on a monthly basis and do
not know exactly how much money they have been paid. You can
bet your bottom dollar the clients who paid you will report
that money (if it is over $600 and they want to take a
deduction they are required to report it to the IRS). If
what you report as income and what they report as being paid
does not match go ahead and waive your "I want an audit
flag."
3. USE THE RIGHT
FORMS! The IRS loves forms. It has hundreds from
which to choose from each year. There are numerous forms
that need to be filed during the year (monthly and
quarterly) and forms that are filed at the end of the year.
Even if you have the right form you must fill it out
correctly. Using the wrong form or filling the form out
incorrectly often results in an audit. Go ahead and waive
your flag.
4. KEEP IMPECABLE
RECORDS OF INCOME AND
EXPENSE! One of the biggest problems for the small
business is a lack of good bookkeeping. Most Small Business
owners know how to make the money. They do not have the time
to track all of
their income and expenses. Yes, waive that flag and while you are at it
scream at the top of your voice, "I WANT THE IRS TO AUDIT
ME."
5. USE ONLY
EMPLOYEES, NOT INDEPENDENT
CONTRACTORS! The IRS has been fighting small business
owners such as yourself for years over the tax
classification of sub-contracted workers. ARE THEY EMPLOYEES
OR ARE THEY INDEPENDENT CONTRACTORS? This is a very
important question as you could be making yourself liable
for payroll taxes, penalties, and
interest.
6. HIRE A
PRO!! Using a professional accountant does not,
by itself, reduce your audit selection score, but it can
help in a number of ways. First, the accountant will spot
troublesome deductions or omissions of income that could
trigger an audit. Accountants are also trained in payroll
taxes which is another soft spot for the IRS. They love
trust fund penalties and if they notice problems with the
payroll taxes they will dive right in looking for other
areas of NONCOMPLIANCE.
Here's how you can NEVER "Have To Worry About
The IRS Again!!" All you have to do is ..
Choose James Financial Services, Inc. To
Professionally Prepare And/Or Electronically File Your Taxes
This Year!
SPECIAL Limited-Time Discount
Offer
Simply bring this page with you when
you come to our tax office and we'll give you $20
OFF ANY TAX SERVICE you
choose.
Harry James, James
Financial Services
152 Newtown Road Suite 102
Virginia Beach, VA 23462
Phone:
757-490-7700
FAX: 757-499-2079
Web Site: www.taxdesigns.com
E-mail: jfs@visi.net
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