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Insider Guides to IRS Audits!
Ever wish that, as a business owner, you knew exactly what would raise "red flags" at the IRS? Or how to make an IRS audit go as smoothly and painlessly as possible?
If you're in the right type of business, you can get that information, directly from the IRS!
Traditionally, IRS examiners have been responsible for auditing many types of businesses. An examiner might audit a grocery store one week and a construction company the next. A lot of the examiner's time was spent learning about the business.
To improve efficiency, the IRS launched the Market Segment Specialization Program (MSSP). Examiners now focus on specific types of businesses. To help the examiners understand each type of business, the agency has developed training guides, called "Audit Techniques Guides." The guides explain the standard practices for the business, and tell the examiners exactly where to look for potential problems. (For example, auto repair shops sometimes don't report the parts they have in stock as inventory.)
The IRS has developed Audit Techniques Guides for dozens of business types, ranging from pizza shops to major league sports franchises. In addition, there are guides that deal with specific business practices, such as executive compensation, shareholder loans, or stock based compensation.
You can download the guides directly from the IRS website. There are other sites that distribute the ATGs as well, and some of them seem to have guides, perhaps a little out of date, that don't appear on the IRS website. Simply search the web for IRS Audit Techniques Guides to find a list!
Bob Nicholson / WYGK Consulting provides business, technology and strategic consulting for small businesses, internet start-ups and entrepreneurs.
Income Tax Returns Your Accountant Should Not File
You've been feeling uneasy (perhaps even guilty) because you've failed to report your under the table business income. Perhaps you've never filed a tax return, even though you know you owe money. Finally, you contact an accountant to resolve the situation.
Amending Procedural Laws for Collection of E-taxation
The electronic transaction ordinance defines the certificated copies in which are to be presented for adjudication. Where any law requires or permits the production of certified copies of any records, such requirement or permission shall extend to print outs or other forms of display of electronic documents where, in addition to fulfillment of the requirements as may be specified in such law relating to certification, it is verified in the manner laid down by the appropriate authority.
SFR Substitute for Returns: IRS Action on Non-Filers
In the latest Star Wars episode, the evil empire executes a brutal revenge on the Jedi. While the IRS is not an evil empire (and due to the Revenue Reform Act of 1998 not very brutal anymore); it too is executing revenge on those who do not comply with filing their tax returns.
How Home-Based Businesses Can Avoid Giving Uncle Sam More than His Share
How Home-Based Businesses Can Avoid Giving Uncle Sam More than His Share By Darren Oliver With the rush to file your taxes by April 15th, you probably did not consider the possibility that you overpaid. According to the General Accounting Office, in 1998 alone, there was $311 million paid unnecessarily to the IRS. Do not count on the IRS to tell you if you have overpaid because they are not required to but you can file an amended return for up to three years. Chances are, you either prepare your business taxes yourself or have your tax preparer or CPA does them. There a number of issues surrounding either tax preparation method, which can result in your tax liability being calculated as higher than it actually is including missed deductions, numerous changes in tax laws or being given incorrect advice. As a home-based business professional, there are a number of deductions you are entitled to which many tax preparers often miss. For example, if you run a home office you are entitled to deduct expenses for the percentage of square footage the home office is occupying. Expenses include the combined total of mortgage interest, property taxes, utilities, repairs, etc. For example, if 250 square feet of a 1,000 square foot house is being used for a home office, you are entitled to deduct a quarter of your total expenses. Although some deductions may seem minor, over an entire year, they can add up to thousands of dollars that you are unnecessarily paying the IRS. That is money that you could be using to grow your business. Karen McClafflin, owner of home-based Secret Canyon Realty in Colorado Springs, CO, was able to recover $11,000 when her tax preparer failed to include home office and automobile deductions in her past returns. Another area, which causes many business owners to overpay, is being given incorrect advice by their CPA, tax preparer or even the IRS directly. In a poll performed by Money Magazine, the average tax preparer, prepares an average of 480 returns between February 1st and April 15th, that is a lot of returns in a relatively short amount of time which makes it difficult for your return to get the time and attention it deserves. This same poll also found there was an average discrepancy of 300% between what the tax preparers said was due and what was actually due. Moreover, in a poll of 50 professional tax preparers, consisting of 10 basic tax questions, none answered all 10 questions correctly and only 34 got at least half correct. This problem does not extend to just tax preparers or CPA's. In the IRS's 2001 assessment of their own 544 call centers, they found that 50% of the time, their representatives gave incorrect or insufficient advice. Whether you do your taxes yourself and had to call the IRS for clarification on an issue or your CPA did, odds are the answer was not accurate. The United States tax law is one of the most complex in the world. Not to mention, tax laws change every year and have changed tremendously in the last couple of years. Even the best tax preparer, CPA or even IRS representative can easily make a mistake or, forget to use an exemption which could reduce your tax liability. If you have not yet filed your taxes, it is a good idea to get a second opinion from an independent source. The extra money and time spent in doing this could save you thousands. Look for someone or a company who: · Has sufficient years preparing home-based business tax returns · Prepares less than the average number of returns between January and April so that your return gets sufficient time and attention. · Have had clients get a second opinion. In addition, talk to those clients to get there first hand insight. · Is willing to pay for a second review of your tax returns to ensure accuracy. · Is willing to take MSN's online Tax IQ Test at http://moneycentral.msn.com/investor/calcs/n_taxq/main.asp. Although designed for consumers, this test contains basic tax information that even junior level tax preparers should know. Just as you trust a surgeon with your life, you trust this individual or company with your money and confidential information. Be highly selective and do not be afraid to put them through a rigorous qualification. If they are not willing to participate in your qualification then either they do not know their stuff or, your business is not that important to them. If you already filed your taxes or think you might have missed out on deductions, have been given bad advice or failed to take advantage of a tax law change which could reduce your liability for previous tax years, what can you do? The good news is that by law, the IRS is required, for up to three years, to review your returns and records as many times as needed to find errors. You have the same three years to get a second opinion and file an amended return. In fact, in 2002, 3.3 million taxpayers filed an amended return. Samuel Rowley, owner of Muffler Masters in Colorado Springs, was able to recover $14,500 through the filing of an amended return when it was found that he overpaid FICA and payroll taxes. You may worry that an amended return will trigger an audit however; the IRS itself admits this is not the case. In 2002 alone, 3.3 million taxpayers filed an amended return. The IRS is not the big, bad agency we used to know. In fact, statistics show that audits are down and continue to decline. Businesses throughout the U.S. overpay their taxes to the tune of billions each year and your money could be part of the billions that is overpaid. When it comes to your taxes, always get a second opinion to ensure you are not paying more than you should and, you can even hit pay dirt by looking back.
The Tax Man Cometh... To Search
You're at your office, or home, and the doorbell rings ? it's the Canada Revenue Agency ("CRA").
State Tax Information
All states also have their own tax system. Typically there is a tax on real estate, and there may be additional income taxes, sales taxes, and excise taxes. Oil and mineral producing states often have a severance tax, which is similar to an excise tax in that tax is paid on products produced, rather than on sales. Taxes on hotel rooms are common, and politically popular because the taxpayers usually do not vote in the jurisdiction levying the tax.
Tax Jokes and Quotes
Do you realize that some tax forms ask you to check a box if you are BLIND?
IRS Lock-In Letters ? What?s An Employer To Do?
Employers often ask employees to designate the amount of tax withholdings for paychecks. Occasionally, employees will fail to withhold a sufficient amount in the eyes of the IRS. The IRS will then send a "lock-in" letter on the amount to be withheld. What's an employer to do?
Tax Tips for Home-Based Business Owners
As tax time approaches, many home-based business owners begin completing their forms or paying their accountants with trepidation. This nervousness comes from two sources: a fear of being audited and a fear of having to pay a lot. For the most part, both of these fears are unfounded.
What You Need To Know About Taxes If You?re Getting Married
It may not be high on the list of wedding planning activities, but there are a few simple steps that can help keep tax issues from interrupting your newly wedded bliss. If you recently married, check out your new tax situation. You might save money or even prevent the problem of a missing refund check.
Fiscal Deity: Tax Consultant
Strategic planning throughout the year results in a minimal tax balance. The objective of planning your tax payables is not to prevent paying taxes, it is to pay no more than your fair share of taxes, and keep your money where it earns you the most.
Rental Property Tax Deductions
Own residential rental properties? This article discusses how income from those properties impacts your taxes.
IRS Obtains More Than 100 Injunctions Against Tax Scheme Promoters
The IRS has obtained civil injunctions against more than 100 promoters of illegal tax avoidance schemes and fraudulent return preparers in an ongoing crackdown that began in 2001. Many of the injunctions, obtained in cooperation with the Department of Justice, also order the promoters to turn over client lists and to cease preparing federal income tax returns for others.
Tax Deductions - Mr. C.P.A. Can I Deduct a Pizza? You Too Can Deduct Your Fun By Using Tax Tips
Recently, I stumbled across a concept that could change your financial life. You can call it a paradigm shift or a new perspective or just a different way to look at things.
Tax Trap #3 -- IRS Penalties, Interest and Love Letters
As a small business owner or self-employed person, one of the easiest ways to keep Uncle Sam off your back and out of your life is to file your forms, payments and other paperwork on time.
How Likely Are You To Be Audited?
Statistics for Individuals
Small Business Tax Deduction - Write-Off Bad Debts
Practically every small business has receivables that it cannot obtain from clients. If your small business doesn't have any such receivables, consider yourself lucky. For those small businesses that suffer from uncollected receivables, solace can be taken from the fact you can claim a tax deduction.
Understanding Marketing Tax Deductions
Marketing is a necessary expense in running practically any business and the IRS acknowledges as much. You may run advertisements on or in the Internet, radio, television, magazines, newspapers and other media to sell your products or services. You should be deducting all of the associated costs on your tax returns.
About Income Taxes; Tidbits
Need an Offshore Sales Office in a Tax Free Environment?
More on the No-tax haven of Anguilla. Click onto the link below for the detailshttp://www.geocities.com/taxhavens123/caribbeantaxhavens.html A Tribute in Honor of: Bank Confidential Ordinances in the Caribbean http://www.geocities.com/taxhavens123/bank_confidentiality.html
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