The IRS Audit Blog

Archive for the ‘Audits of Businesses’ Category

Question: Taxes when accepting a Purchase Order being a Sole-Proprietor?

I own a small online business of wholesale goods. Im talking to a school now that wants to purchase around $350 worth of goods from me.

My online business is not really registered with BOE or anything like that. It is just under my name I believe.

Right now, a school wants to purchase from me.

Theyre asking me to fill up a form, which includes filling up the “Business Name” and “Tax Identification Number”.

Would you guys suggest that I still push through with the order, that I have to give my SS, name, and DBA? This is my first time accepting a purchase order, and I dont really want to lose this client just for this small reason.

My only concern is that giving my SS to the client might lead into a “audit” problem in the future, if ever irs investigates me.

I do plan however to sign up for a business permit this April, so this probably be my only time doing a PO under my name.

Answer: It is simple to get a Tax Identification Number and register your business with the IRS….

http://www.irs.gov/businesses/small/article/0,,id=98350,00.html

good luck & bless

Business Briefs

Unsold flats worth up to 11bn Kč – Deloitte The value of unsold apartments in Prague is estimated at between 10 billion and 11 billion Kč, according to Filip Endal of Deloitte in a Nov. 26 HN report. Prague currently has 3,500 new units that are unsold, he said.

Tax Audit

The Big Tax Increase Facing Small Business

Hedge fund taxes get all the attention. Congress is about to raise billions in taxes on some doctors, accountants and architects.

Boca Raton Tax Accountant, Business Tax Audit Boca, FL, 33431

Question: Do I get in trouble for over-reporting my income on tax returns? Or just under reporting?

I’m self-employed. If I don’t take all my deductions, in order to make my net look higher than it would be otherwise, does the IRS care? After all, they’d be making more money right?

In other words, are deductions optional?

Also, what if I accidentally put a larger gross than I actually made? Won’t an audit reveal I’m due a refund?

Answer: You could get in trouble , if caught, if you did it in order to commit fraud. Two possibilities come to mind: Exaggerating your income to increase earned income credit (defrauding the government), or exaggerating your income to qualify for a loan (defrauding the bank).

Tax Tips: The joys (and woes) of self employment

As the economy continues to stumble along with uncertainty, many are starting to look at the self-employment option as the way to get ahead.

Tips for Filing Taxes : How to Appeal an IRS Audit

Question: Is this tax evasion or is it legal?

Is it tax evasion if a small business owner buys a luxury car (Mercedes, BMW, Porsche, etc.) for his kid and claims it as a business expense? Or what if the entire family claims that 100% of the miles they drive are business-related? Would this person ever be audited by the IRS?

Answer: Yes, it is tax fraud. You could call the IRS and report it, which would make it more likely they get audited.

National Tax Firm Launches Campaign Against Financial-transaction Tax

A proposed financial-transaction tax on stocks, futures, and other instruments may look like a quick and easy fix to the nation’s economic woes, but tax firm GreenTraderTax strongly disagrees, citing dangerous effects to the U.S. economy and marketplace. Its campaign to stop this tax is in full swing, and organizers are calling all traders, financial professionals, brokers, and other …

Income Tax Attorney-Stop Collections and Settle Fast

Question: Should I be freaked out by a City Audit?

I just received a letter from the city (not IRS):

IMPORTANT NOTICE OF AUDIT for 2005-2007

Should I be freaked out? They said this is a random audit, but am I being paranoid in thinking that it is NOT random? I have not been conducting any business since October 2007 since I broke my leg when I was 9 months pregnant & have been on maternity leave ever since. Should I find a tax attorney? I have a small design business (I am the sole employee, but set up as LLC) and have not made much money. I am very freaked & don’t understand why they would be targeting someone who is just not making any money? (I need all the money I have since I have not been working since October & need to take care of my baby!)

Thanks for any advice!

Answer: Random audits do exist, and they couldn’t claim that it’s random if it wasn’t. So don’t be freaked. It might be worth having advice from a tax attorney though.

Bibby Financial Services Offers 10 New Year’s Resolutions For Small and Medium-Sized Businesses

The start of the new year is an excellent time for owners of small and medium-sized businesses to manage cash flow more efficiently so they can improve their performance. Bibby Financial Services, a leading provider of factoring and accounts receivable financing, is offering 10 New Year’s Resolutions geared at helping businesses achieve greater financial success.

Writing as a Small Business