Common Small-Business Tax Snafus – Don’t Be Afraid of the IRS
Most people, upon getting any kind of notice from the IRS, immediately feel fear and panic. The horror stories are out there: individuals and companies that were audited and left bankrupt after a grueling investigation that ended with a giant tax, interest, and penalty bill. That does happen, but very rarely. Most IRS notices can be handled through the mail, with copies of requested documents.
Even if you are called in for a full-blown IRS audit, don’t worry. As long as you’ve acted in good faith and kept decent records, everything is likely to work out just fine. Sure, you may have to pay a little more tax than you originally thought, and that may have some interest and penalties attached to it. More often than not, though, the settlement won’t even come close to putting you out of business.
There are some simple things you can do to prepare for the possibility of having to deal with the IRS:
- Fill out the right tax forms completely, attach everything that needs to be attached, and mail them in on time.
- Check all your numbers two or three times before sending any forms.
- Make all the tax deposits you’re required to make, on time.
- Let a qualified tax preparer do all or most of the tax work.
A lot of the time, IRS notices come because a form is incomplete or filled out wrong. In fact, one of the most common reasons is a missing signature. Sometimes, random individuals or businesses are flagged for audit, just to see if there’s any extra revenue the IRS can collect; after all, that is its job. Even then, since you haven’t done anything intentionally wrong, you don’t have much to worry about (though you probably still will worry). To avoid as much stress as possible, the easiest way to deal with the IRS is to have your accountant deal with it for you.