IRS Tax Debt Help – Audits On The Rise

Business Tax Audits on the Rise Plus 2011 Tax Adjustments That Could Cost Your Enterprise More than $six,000

The IRS is at it once again. The stealthy and highly aggressive agency has additional two new 1099 tax types for companies, requiring extra caution and a great number of a lot more hours in reporting and preparing your tax returns. This means all organization, no matter how modest, will be affected. Regardless of whether big or modest, it is essential to be aware of these new tax extensions NOW- or you could discover oneself in Massive difficulty when filing your tax return following year.

Additionally, we can anticipate the number of IRS audits to carry on to rise for little-business owners in 2010. About 25% to 30% of my tax relief customers are tiny corporations with tax troubles – so I know how essential it is to stay away from IRS penalties, IRS audits or other tax difficulties that could be detrimental to your organization.

Neil deMause revealed in his CNNMoney.com post “Stealth IRS alterations mean millions of new tax forms” these two new tax extensions:

1) 1099-K – an extension to the 1099 type, which needs companies to report non-wage earnings (dividends, earned interest, contract work). The 1099-K addresses “difficult -to-track” payment streams employed by organizations: credit cards. From 2011, companies making above 200 payment transactions per year (and totaling more than $20,000) via credit or debit cards have to fill out the 1099-K, documenting the year’s transactions and send this to their clients and the IRS. ??This will have tiny impact on firms presently reporting all credit card transactions to the IRS, though if you are not currently in the practice of carrying out so, it’ll be worth it to anticipate this for the near future.

2) 1099-Misc – utilized by firms use to record payments to person service providers and freelance workers, has been massively expanded to contain, from 2012, all annual company payments and purchases over $600. While previously payments to corporations and purchases of goods have been excluded, now all??corporations??need to obtain the taxpayer ID range of firm or person you are paying. This type will now be a tracking mechanism used for any and all business transactions.

What This Implies For Your Organization: Swimming in Paperwork and Receipts!

The simple truth is that these extensions to tax legislation are quite the burden. There is a high probability you might??get lost in the paperwork and tracking of receipts. ??A modest business presently spends 3 – 5 hours a year on typical filing 1099 types. A survey conducted by Pennsylvania-primarily based SMC Enterprise Councils, exhibits that filing these two 1099 extensions for solutions purchased from corporations only would result in a standard little organization at least 200 filings per year and an added cost of $six,000 in preparing yearly tax returns. This estimate excludes the requirement for filing 1099s for purchases of goods – this would trigger a staggering increase.

How did this tax provision blizzard come upon us???This new legislation has been in the operates because 2007 when a tax-gap research was conducted.??This ‘tax gap’ between businesses and folks expenses the government about $300 billion per year in lost revenue.??The study showed that adding added 1099 tax extension forms could make $345 billion per year in federal tax income and this is??in which the wellbeing reform bill comes into play. These two extension specifications are portion of the wellbeing reform bill – snuck in the 2,000 page bill, permitting the government to track down unreported earnings. The purpose of this new tax legislation is to catch revenue that is not presently reported to the IRS.

If your business is under audit or you owe back taxes or IRS penalties – it’s critical to get immediate tax relief to shield the long term of your company. And you don’t want to go up against the IRS alone devoid of the expert aid of a skilled tax attorney or Certified Tax Resolution Specialist.

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About The Author

TK Bradley

tk bradley is a tax relief expert with many years of dealing with the irs and helping taxpayers to understand their rights and to settle their tax debt problems.