Posted on 08/10/2013 9:39:44 AM PDT by reaganaut1
Thousands of small-business owners have received letters from the Internal Revenue Service questioning whether they are underreporting their business income, a harbinger of a broader initiative aimed at boosting federal tax receipts and ensuring compliance.
The program is the latest move in the agency's effort to combat what it sees as a widespread problem: failure by businesses, including mom-and-pops, to report all cash sales in order to minimize tax bills.
Tax officials say the letters don't constitute an audit and instead are simply a request for more information. Some business owners and some lawmakers, however, call the new IRS program alarming.
[...]
The IRS says it is sending out about 20,000 letters to business owners as the program cranks up. While that is a small portion of the total number of U.S. small businesses, which is estimated in the millions, some tax accountants say they expect the program to expand.
Roger Harris, president of Padgett Business Services, a nationwide accounting firm that specializes in small businesses, said the letters have "created some heartache in the small business community."
The IRS program stems from a 2008 change in the law that gave the agency broader access to merchants' credit- and debit-card transaction records. The IRS has been comparing the data to information that small businesses report on their tax returns. If the data suggest an unusually large percentage of a business's receipts come from card transactions, the IRS might send a letter asking the business owner to explain why cash receipts seem relatively low.
(Excerpt) Read more at online.wsj.com ...
These businesses should send back a letter questioning whether the federal government is overspending its budget
how long are we going to sit by and watch this crook and his minions get away with this...this asshole traitor needs to be stopped, is there no one in congress with balls.....
The IRS already monitors Facebook posts to try to determine if you are purchasing things with money that has not been declared.
I hope you are reading this NSA.
Would it be too cynical to think there will be a correlation between the mailing list and the donors to the Tea Party????
Never, ever, never, ever, underreport income. Way too easy to be caught on that side of the ledger.
If I use my debit card 30 times a month, I get a very good interest rate on my checking account. I use it almost every work day to buy coffee at DD. With programs like this, it is not surprising that more and more is done with credit cards.
An unusually large percentage of small business owners are conservatives. I think that is what is really behind this.
Why cheat on your taxes?
Just take out a big student loan and don’t repay it.
You don’t even have to report it as income.
Millions of others have paved the way and they aren’t all poor people at the bottom of the income ladder.
the last list I saw of people who hadn’t repaid their loans included, doctors, lawyers, politicians, college profs, etc.
The obvious solution to problems like this is to do away with the income tax and the IRS, and replace them (with reduction) by sales taxes, which are simpler to collect.
If they keep this up, small business owners are going to go nuts and waste endless hours of their time crossing all the t’s and dotting the i’s. I already spend an inordinate amount of time doing my personal income taxes, and they aren’t even all that complicated—relatively speaking. But they give me an annual headache. Literally.
At least some small business owners will throw up their hands and go out of business, or lay off some of their staff, or take other measures to simplify their burdensome taxes. Burdensome both financially and as heavy weights on their time and sanity.
It's the way of the totalitarian left.
Small business is one of the financial oligarchy’s biggest enemies.
Small business is the primary path from servitude to wealth.
The financial oligarchy does not want “the masses” gaining wealth, since that - coupled with some “hidden in plain sight” knowledge and some teamwork - would eventually lead to a direct confrontation of the corruption of the financial oligarchy.
When the occasional individual scratches and claws their way to the wealth, they find themselves investing in and accepting debt and equity financing from the capital markets, which are controlled by the financial oligarchy. Thus, a tremendous amount of force builds up on the newly wealthy person to adopt the agenda and methods of the financial oligarchy.
I guess those receiving the letters did not donate enough, or at all, to King Zero’s re-election and must now pay the penalty for such obstinance.
We have a “very small” Mom & Pop shipping business called GoinPostal.90% of our business is credit cards. We have so little petty cash that we can’t even buy lunch from it. I hope they send me such a letter so I can screw with them. It could be a lot of fun or maybe they will make my life hell. I am too old to let them bother me so bring it on IRS.
>> Never, ever, never, ever, underreport income. Way too easy to be caught on that side of the ledger.
That’s it in a nutshell.
Easy for me to say though — I work strictly on a purchase order/invoice/payment-by-check basis. The paper trail is pretty much airtight.
I can see why retail businesses would have heartburn over this ploy, whether or not they’re skimming a little off the top.
The ones who are scrupulously honest and get that IRS letter anyway must be *furious*. I know I would be.
That is a brilliant tactic. Thanks for posting.
did ya get that NSA, I can repeat it.
Same kind of punitive abusive crap occurred with the king and all the kings men, just prior to Revolution #1.
Nothing different....
Those who gain power want more power, more control, more of your assets and more and more of your money...
Either people eventually put a stop to this, or they ultimately become slaves to those in government.
Completely agree. On the other side, make sure you take all of the deductions you are entitled too. For instance, talk to your accountant about making contributions to charity and etc. through your business instead of your personal account. Pay someone to do something for the business instead of giving them money. Keep an accurate log of miles driven for the business. Take the whole crew out for a business luncheon meeting at Joe's dinner once in awhile.
Basically take every deduction you're entitled to take. Some work, but this is one time when a penny saved is indeed a penny earned, and as importantly, a penny kept out of the hands of the bureaucrats while providing a sense of satisfaction in doing so.
Get educated, share information, talk to your accountant, keep accurate records. If every small business just started doing this, it would have a huge impact in the war on small business.
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