Help your Business Emerge from an IRS Tax Audit Owing Nothing (as Opposed to Owning Nothing)

No business wants to tangle with a snorting and charging IRS (come to that, no individual person hopes for that either). Small businesses can be especially vulnerable to an IRS tax audit - in particular, ones like small stores and restaurants that do a lot of cash business. Mistakes happen when you handle cash. Any time a business finds itself marked by the IRS they know that it doesn't matter if they are found innocent of any tax law abuse in the end - it's going to cost them a lot of money and a lot of time. Not to mention everyone's going to go home with an ulcer in the end.

There are things you can do though, that can help you go through the ordeal with the minimum fuss possible and help you emerge at the other end owing nothing (as opposed to owning nothing).

When you receive notice that you are under IRS tax audit, that isn't to send you into a panic. Most audits aren't the body cavity-search experience that you hear they can be. Usually, all they want is a little reassurance that some math error somewhere is only a clerical mistake. Sometimes, they'll find that the numbers on your 1099 doesn't agree with the figures on the company return. If you could just do a new tax form or give them the right document, they'll just go away (they have other people to torture, you know). Sometimes, there are certain deductions that entities like real estate investment businesses can claim that wouldn't apply to other businesses. The auditor will just want to know that all is on the up and up.

Not even accountants and CPAs deal with the IRS on their own when they have the bad luck to get audited. It's stressful for them too. CPAs hire CPAs or tax attorneys when they are audited. It takes emotion out of the experience. A self-composed professional can zero in on problems in an IRS auditor's assertions. The tax law isn't black and white in all places. A lot of the time, laws can be open to interpretation. And an auditor, can choose to take a hardline for no reason. It takes a knowledgeable tax authority to be able to argue with such an auditor.

Remember how in the movies the police always say that anything you say can and will be used against you in court of law? That applies to audits to. In your to appear cooperative, you might volunteer information that they could use against you. Remember that you're not to the trust the IRS (not that you would need to be told that, but people tend to forget when they feel threatened). You want to give the IRS exactly as much as they ask and no more. If possible, answer everything with a yes or no.

In the end, you don't want to assume that whatever the IRS tax audit contends is right. They are as liable to make mistakes as anybody.

You always Knew that IRS Income Tax Calculations had to be a Rip-Off

All you hear about these days when you open the papers or turn on the news is how the country has a terrible federal budget deficit and how something has to be done to bring it under control. One of the solutions that is suggested from time to time is that the government should think of initiating IRS reform for a better way in which to collect revenues and to do away with inefficiencies. IRS income tax reform should occur for other reasons as well though. As disgruntled taxpayers have noted for ages, there is so much about the laws that the IRS runs on that can be unfair to the taxpayer. Should reform ever come about, these are what the IRS should correct before anything else.

Renting a home to live in as opposed to buying, has become far more popular today ever since the housing crisis started. If you own a home, you can claim a tax deduction for your property taxes and for your mortgage interest. If you sell your home, you don't pay any income tax for up to a half-million dollars. If you make any green improvements to your home, you get tax credits. Now renters get no IRS income tax breaks whatsoever. Which, if you think about it, is unfair. Either renters should get the kinds of tax breaks that homeowners do, or homeowners should lose their tax breaks as well.

Let's say that you have a job where you don't get health insurance coverage. You have no choice but to get coverage by buying it on the open market. With your after-tax salary. There are no tax write offs that you can claim then. To employees who have health coverage at work though it's tax-free. Even people who run their own business have permission to write off whatever they pay in premiums. It's just the poor people who work jobs that don't offer coverage who get nothing. This kind of IRS income tax discrimination has to stop.

Most people hate being taxed once; how about paying the IRS income tax three times for the same income? That's what happens when your Social Security benefits are taxed. You'll notice this when you first start receiving your benefits. About 85% of your check is taxable. The problem with that being taxable, is this. Social Security benefits aren't free; they are technically supposed to be income you were supposed to be paid when you worked, that the government just held back for you so that you would have something to live on after retirement. So technically, that's income you've already earned. If the government has been holding onto your money for this long, they earn something on it. And anyway, Social Security is something that is considered a part of your taxable salary when you work. You've already paid taxes on them; and you've forgone interest; now when you actually get your check, you're paying taxes.

Look at it this way - the government is already completely short of money. What would they do if they didn't get you three times for the same thing?