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Business owners: 3 tips to help during a sales tax audit

Business owners subjected to a sales tax audit can take proactive steps to ease the process. Some tips that apply to most in this situation include:

  • Cooperate. A recent publication in the CPA Practice Advisor notes a top mistake made during a sales tax audit is giving the auditor a hard time. Although it is important to contact an attorney and have legal counsel to help better ensure your rights are protected during the process, business owners should avoid intentionally making the process difficult. Examples to avoid include providing messy, unorganized records or an intentionally uncomfortable workspace. 

Can taxpayers offer the IRS a settlement?

Not everyone can pay their tax bill. These situations can impact anyone, including some of the Hollywood elite. Famous actor Wesley Snipes provides an example. The actor attempted to make a deal with the Internal Revenue Service (IRS) after getting a $23.5 million tax bill.

He did this by offering a settlement, referred to as an offer in compromise.

Making $20,000 has more IRS scrutiny than higher incomes

It would be easy to assume the IRS spends most of their time carefully looking over the taxes of highly paid individuals. After all, the more money that exists in accounts and investments, the more complex the assets can become. It makes sense it would be easier for mistakes to happen.

However, the IRS does not just focus on those making six figures. They work to audit a variety of income levels, which includes people living with low-income levels. These people often qualify for The Earned Income Tax Credit (EITC or EIC), which reduces the amount of taxes owed and often provides a refund.

Real estate and the Qualified Income Business Deduction

The Tax Cuts and Jobs Act (TCJA) includes a provision that allows qualifying business owners to take an income deduction (QBID). The vague language and complexity of the 20 percent pass-through deduction continues to cause frustration for business owners. Which business owners can take the deduction? Who cannot? This piece will focus on how this provision of the TCJA impacts those in the real estate business.

Businesses have new tax rules for holiday meals and entertainment

The holidays are right around the corner. In the weeks leading up to holiday breaks, many companies will treat their employees, vendors and other associates to perks for another great year of working together.

However, new changes to the Tax Cuts and Jobs Act (TCJA) are eliminating certain tax breaks that a business could claim relating to these meals and entertainment.

Got foreign accounts? IRS has new reporting requirements.

The Internal Revenue Service (IRS) recently announced new reporting requirements for United States taxpayers with foreign accounts. The change is in part due to the sunset of the offshore voluntary disclosures program (OVDP).

Who can benefit from the new program? The agency explains the program is designed to offer those who face potential criminal charges for willfully failing to report foreign assets to voluntarily disclose these assets. In exchange, the government will mitigate the risk of penalties.

Three ways to reduce your tax bill

The Tax Cuts and Jobs Act resulted in major tax reform. Savvy tax planners can make the most of these changes and take steps to reduce their tax obligations. Three specific examples include adjusting how you donate to charitable donations, making sure you can get certain business deductions and using tactics that work for your specific income bracket.

Amazon chooses headquarters in Long Island -- despite high taxes

Finding the right business headquarters is an important choice. The right location can help set the company's image and impact the type of workers that are interested in working for the business.

Amazon to build headquarters in New York

Tax fraud and timelines: How far back will the IRS look?

Worried about accusations of tax fraud from the Internal Revenue Service (IRS)? The term “statute of limitations” may come to mind. Does the IRS have to play by the same rules as other government agencies? Is there a time limit when it comes to looking back at tax obligations?

Like many things in the legal world, the answer is — maybe. Before we delve into the timeline the IRS has to follow, let’s cover a few basic questions:

Wesley Snipes’ case shows inner workings of tax court

A large tax bill may warrant a challenge. However, building a successful case against the Internal Revenue Service (IRS) is not an easy task. Former Hollywood great Wesley Snipes provides an example.

Mr. Snipes has taken on the IRS a couple of times. In 2010 he lost a battle against the agency over a failure to file taxes. His most recent battle involves an offer in compromise.

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