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To: BobL

Thanks for the welcome. And I don’t want any illegal advice.

As I said in my original post, I’ve always paid my bills (including taxes) and don’t like trouble in my life. I want to do the right thing. Just not sure where to start.


54 posted on 04/18/2014 7:36:30 PM PDT by elahtap
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To: elahtap
"Just not sure where to start."

Start by constructing a NARRATIVE.

Which might go something like:

"In 2010 we thought it would be a good idea to go into widget business.

In June 2010 we paid $80K for Western Black Hole Enterprises. We decided to spend an additional $4500 for a new desk, potted plants, and a copy machine. Either you did, or did not, start a separate biz account under the fictitious business name, or dba. I can see that's where the first check was written. Every month thereafter we paid $450 a month rent to rent the quarters from which we ran the biz. In August 2010 we had to repair the whatsis machine, here is the check #2104 we wrote. Keep going until today, construct a narrative to the best of your memory. Find your checkbooks and/or whatever credit card statements you used to pay for stuff. Download a copy of Schedule "C" from irs.gov. Look at the expense portion. Those are the valid categories of expenses.

It looks like this:

 photo sch_c_zps1f49f0af.gif

Now you get a wide piece of paper, you can get accounting ledgers at the Dollar Store because people seldom use them, or, you can buy one for $20 at Staples or wherever.

Top of page: "2010 expenses" Columns across the page: "advertising...car/tuck...commissions and fees..... Just like the categories on the Schedule C.

Down the page, write any check which was a biz ck and place the amount in the appropriate column.

Continue to the next page if needed.

Do the same for 2011, 2012, 2013, 2014.

If there are expenses for other things, start a log of the check you wrote to pay for it and what it was for.

Get your post-it notes and make notations to where you left off, you are not going to do this all at once. But resolve to start it and continue it.

If it's a pain in the ass, then think about how many $45 hours you will not be spending having someone interview you as to such thing and where you put the receipts.

The one thing I can tell you is that if you paid wages to W-2 employees and did not withhold and did not remit those withholdings, you could be in far more serious trouble. If you had no employees and paid no wages, you have no IRS (and state) jackboots to worry about. But you will have to go through this, and any CPA will make you go through this, and you either do it yourself or pay out the nose to get it done. You might consider hiring a $15 an hour bookkeeper guy/gal to help you organize these things, but make sure you interview them as to their ability to forensically go through and reconstruct prior years stuff. Make sure you tell them they are being hired to get on your ass and make you find the source documents and transfer the data to where it can be collected and summarized to file prior years tax returns. And make sure you tell them they are NOT being hired as bookkeeps for an ongoing business, but for this forensic exercise, and they will need to come over not just for two hours every other Thursday but for some number of consecutive days for several hours each day. And you emphasize they are being hired to MAKE YOU get your stuff in order. Find a middle-aged, schoolteacher-stern type woman, not a trainee from the local junior college. You need some amount of mean.

THAT is how you start.

61 posted on 04/18/2014 8:10:35 PM PDT by Attention Surplus Disorder (At no time was the Obama administration aware of what the Obama administration was doing)
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To: elahtap

Just keeping people on their guard, considering what’s out there for us - especially when it comes to the IRS.


112 posted on 04/19/2014 5:26:33 AM PDT by BobL
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To: elahtap

Just to chime in at the end of a long thread.

Which state do you live?

Was the business incorporated or is it in your wife’s name?

It is after April 15, which is the final date that TY 2010 returns can be filed and expect a return.

Did you have employees that were not family members? That changes lots of potential issues.

I am a tax professional, but you better listen to BAW and tired&retired ASAP.

Those are the guys that I call when I have a tax question.

The good news - it probably is not as bad as you think.

Start FReepmailing BAW and tired&retired so your blood pressure drops.


113 posted on 04/19/2014 5:54:47 AM PDT by texas booster (Join FreeRepublic's Folding@Home team (Team # 36120) Cure Alzheimer's!)
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