The IRS and Audits
- Accountant Attorney Blog Business Broker Business Valuation Due Diligence New Jersey Business Broker New Jersey Business Owners Taxes
- 0 comment so far
The IRS and Audits
This is off-topic in that it does not relate to buying or selling a business but it is every small business owner’s worst nightmare. GETTING AUDITED BY THE IRS.
If you are an honest taxpayer, there is really nothing to fear from an audit. You will have the records to support the reported income, and you will have invoices and canceled checks to support the expenses. You will not have claimed personal living expenses as business deductions. You have not taken tax law positions that are legally ridiculous. And finally, your declared income will be sufficient to support your lifestyle; that is, you will not be paying a mortgage of $10,000 per month and declaring an income of $40,000 per year.
But what if, like many small business people, you are a tax cheat. I hate to say it, but that is the reality. Many small business people are big-time tax cheats. So let’s say that you receive a certified letter from an IRS agent saying that they would like to have a little chat with you at an IRS office, and you are to bring your records with you. What do you do?
Cheating and Problems
Let’s say that you are a big-time tax cheat. And you know if you are. You have a big-time problem. First, if there is any possibility at all that you could have a criminal problem, call an attorney. Not a tax attorney, but a criminal attorney since the issue is not money but your constitutional rights. Do not have your accountant represent you! Representation before the IRS is an adversarial proceeding that should be handled by an attorney, not an accountant, even if the matter has no potential to turn criminal. Let me say it again – an IRS audit should be handled by a lawyer, even if some accountant promises to “do it for less”.
For some reason, many small business people today seem to think that owning a small business exempts them from having to pay taxes. This may come from Fox News and the right-wing press – after all taxation is theft.
Do yourself a favor; pay your taxes.
#IRSAudits #IRS #TaxCheats #HonestTaxpayers #CrownBusinessBrokers