| Tax audits are on the rise as the government steps | | | | Deductions (in other words, someone who doesn't |
| up IRS enforcement to fund deficit-reducing activities. | | | | itemize or have any unreimbursed employee business |
| Individuals and businesses - both big and small - can be | | | | expenses). |
| financially crippled in the current economic downturn if | | | | |
| they fail to meet their tax obligations. | | | | File your tax return on time, even if you don't have the |
| With business audits on the rise, it is more important | | | | money to pay your tax bill. |
| than ever to know what triggers an audit, how to | | | | If you can't afford to pay your taxes, you can still file |
| avoid being audited and how to get tax help if the IRS | | | | your return on time and save 25% on the failure to file |
| is after you. | | | | penalty right off the bat. What many people don't |
| For anyone planning to start and/or grow your | | | | understand is that filing an extension just puts off the |
| business, it is crucial to know how to avoid tax trouble, | | | | inevitable, because it's not an extension of time to pay, |
| especially payroll tax problems. I know this because I | | | | it's just an extension of time to file. It is also important |
| am a business owner myself. Plus, 25% to 30% of my | | | | to know that it's a misdemeanor in this country not to |
| tax relief clients are small businesses with tax | | | | file a legally required return when it is due. |
| problems. | | | | Penalty proof your small business when filing for IRS |
| I always tell people who are struggling to overcome | | | | tax extensions. |
| their tax burdens that knowledge is power and the | | | | When filing for an extension, it is important to avoid |
| key to gaining a new lease on your financial life. | | | | underpaying your taxes. If you are forced to file an |
| What could trigger an audit? | | | | extension (due to not having all your information |
| The number ONE red flag in triggering a tax audit is | | | | organized) you must send a check with the extension |
| claiming false business expenses. Monies from your | | | | (less what you withheld or paid in through estimated |
| expenses' payments must be used for legitimate | | | | quarterly taxes in 2008) equal to 100% of your total |
| business-related activities. Many people end up in tax | | | | tax liability for 2007 to avoid underpayment of tax |
| trouble when they used these monies for personal | | | | penalty. You may also penalty proof yourself by |
| purposes and falsely characterize them as legitimate | | | | paying in 90% of what you think you are going to owe |
| business expenses. This can be seen as a failure to | | | | for 2008. |
| report additional income on your tax return. | | | | What do I do if I get audited? |
| Avoid payroll tax problems. | | | | The best thing to do is get professional tax help! |
| Generally, owing payroll taxes is the "kiss of death" for | | | | Fighting the IRS on your own is a "lose/lose" |
| many small business owners, whether they operate | | | | proposition. You WILL get "creamed". It's like to going |
| their entities as a sole proprietorships, corporations ("C" | | | | to court without a lawyer. You will need a seasoned |
| or "S" - doesn't matter) or LLCs. Many lose their | | | | tax professional who is a Certified Tax Resolution |
| businesses. When it comes to payroll tax debt, the IRS | | | | Specialist to represent you before the IRS and help |
| has unyielding power and authority to collect. They | | | | you put together a tax relief action plan. An ethical and |
| have the power to padlock your front doors, putting | | | | experienced tax resolution company can help you |
| you out of business, without obtaining a court order. | | | | reduce your IRS debt by qualifying for an offer in |
| Hire a good bookkeeper and accountant to avoid IRS | | | | compromise settlement - where the IRS will accept a |
| tax problems. | | | | much smaller lump sum for the total debt that's owed |
| One easy way to avoid tax problems is to hire a good | | | | if you can prove that you do not have the future ability |
| bookkeeper. You should have a capable bookkeeper | | | | to pay the IRS off. Other tax resolution strategies |
| that knows double entry accounting. Also, hiring an | | | | include monthly IRS payment plans, computational |
| expert CPA or EA to prepare your return is a small | | | | abatement of penalties, abatement of penalties due to |
| annual investment that can pay off big! I would not | | | | reasonable cause, and analyzing the statute of |
| recommend doing your own taxes unless you are a | | | | limitation to assess. |
| straight W-2 wage earner that takes the Standard | | | | |