While running your own business may sound ideal, there are some IRS pitfalls that many unwitting entrepreneurs find themselves entangled in. A recent Forbes article titled: “Entrepreneurs: Don’t Make These Mistakes with the IRS” highlights the three biggest mistakes people make that bring on the IRS heat and scrutiny.
Mistake #1 – Playing Fast-And-Loose With Compliance And Recordkeeping
Questionable bookkeeping practices can trigger an IRS audit. Thankfully, there are many tools such as accounting systems like Quickbooks that can organize and help prepare tax returns and estimated payments and deductions. Our New England CPA Firm works with many small businesses to keep accounting practices in check.
Mistake #2 – Always Going One-On-One With The IRS
According to the Forbes article, when dealing with the IRS, there are certain things you should be able to do on your own. Examples include:
- Resolving a low dollar tax debt
- Substantiating a disputed deduction (by writing a letter that includes a check or receipt)
- Setting up an installment plan if the amount is under $25,000 (the IRS will likely accept it automatically)
The Forbes article recommends you seek out help from a credentialed tax professional with the following tax issues:
- An audit
- Your tax debt is over $25,000 (often requiring an extensive disclosure of your financial information)
- The IRS has issued liens or levies
Mistake #3 – Avoiding The IRS
The good news is that most tax notices can often be resolved quickly. The bad news is that ignoring those notices doesn’t make the tax issue goes away. In fact, it makes it worse and more expensive.
If you are dealing with a tax debt problem, it is in your best interest to consult with an experienced and credentialed tax resolution professional who specializes in tax resolution to discuss your option and strategy to resolve tax issues. Sean O’Hare CEO of Tax Debt Assistance is a CERTIFIED tax resolution specialist and EA. He has been a CPA for over 20 years and is known as New England’s go-to tax resolution expert.
Sean and his team of tax professionals help individuals and businesses with their taxes throughout the New England area. If you have questions or want to schedule a free consultation with one of a tax resolution experts, give a call at (855) 479-2400.