Showing posts from May, 2014

IRS Letter 5043 - Attacking Small Businesses that Receive Too Much in Credit Cards

IRS Letter 5043 - New way IRS Attacks Small Business

Attempt to get "Cash" businesses The IRS has been pushing for many years to capture cash income of small businesses and force him to pay taxes.  That is one of the reasons that the IRS is requiring credit card merchant service companies to report a 1099-K for businesses to the IRS.  This form lists the amount of credit card payments made to the business by its customers.  The IRS then takes this information, comparing it to the gross sales of the business.  If the business has too high of a percentage of credit card sales, the IRS issues a letter 5043.

This letter starts out that "your gross receipts may be underreported."  This is the beginning of a long series of letters and correspondence which could eventually lead to an audit in an attempt to force businesses to report cash income.  Most of the letters seem to be going out to clients that are restaurants, pizza parlors, bars and other small retail businesse…