TaxEsqBlog -by Ronald J. Cappuccio, J.D., LL.M.(Tax)

IRS Audit Techniques Guides provide clues to what may come up if your business is audited IRS examiners use Audit Techniques Guides (ATGs) to prepare for audits — and so can small business owners. Many ATGs target specific industries, such as construction. Others address issues that frequently arise in audits, such as executive compensation and fringe benefits. These publications can provide valuable insights into issues that might surface if your business is audited. What do ATGs cover? The IRS compiles information obtained from past examinations of taxpayers and publishes its findings in ATGs. Typically, these publications explain: The nature of the industry or issue, Accounting methods commonly used in an industry, Relevant audit examination techniques, Common and industry-specific compliance issues, Business practices, Industry terminology, and Sample interview questions. By using a specific ATG, an examiner may, for example, be able to reconcile discrepancies...

IRS Audits and Collections down for 2016 IRS has issued the 2017 IRS Data Book, its annual publication containing statistical tables and IRS organizational information. One key figure in the Data Book is the rate at which IRS audited returns in 2017 – it dropped to 0.6%, the lowest rate since 2002. Background. Each year, IRS issues the Data Book, which describes activities from the most-recently ended fiscal year and includes information about tax returns, refunds, examinations and appeals, illustrated with charts showing changes in IRS enforcement activities, taxpayer assistance levels, tax-exempt activities, legal support workload, and IRS budget and workforce levels compared to the previous fiscal year. Interesting statistics in the 2017 book. Some of the interesting statistics from the 2017 book, which covers IRS activities conducted during the period from Oct. 1, 2016 to Sept. 30, 2017, include: There were fewer audits during fiscal year 2017, as compared to fisca...

European governments are attacking American businesses trying to get as much tax money as possible. The latest leader in this witchhunt is France. They are not only going after companies for large civil taxes but they are at going after the businesses and the employees of the business for criminal penalties and possibly jail. Leading the list are Google, McDonald's and Bookings.com. All these companies have some relationship to France by having services sold through subsidiaries, but the French do not care about legal structures of business. They just want their tax! This sounds a lot like many State governments. New Jersey is always trying to find "nexus" to pull in out-of-state businesses as being subject to New Jersey taxes. Also any business located in New Jersey is subject to grueling sales and use tax audits and lengthy appeals and court hearings. It is a real problem particularly when the company tries to handle it themselves or have an accountant represent them ...

The IRS has finally announced that it will stop the automatic issuing of federal tax liens, levies and executions during the government shut down.  Unfortunately, many automatic levies have been issued by the IRS and there is no one in the IRS to talk to or negotiate with to set up installment agreements or take other actions to remove the levy.  This results in great hardship for taxpayers. The IRS has been issuing notices, some dated October 7, 2013, even though the office was to be shut down by October 1, 2013.  It is hard for me to believe that this was not designed to have maximum impact upon taxpayers.  In fact all the IRS services that normally assist taxpayers, whether its at a service center, or on the telephone, as well as the normal collection and auditing function, have been terminated during the shutdown.  This intentional design clearly is to put a maximum negative impact upon taxpayers. Because of the complaints, the IRS is now issued a revise...

IRS Increasing Audits of Businesses with Subcontractors! The Wall Street Journal reported today the IRS is attacking business. Established and growing companies are being audited by the Internal Revenue Service to force compaies to treat independent contractors as employees. Construction subcontractors, cable installers, drivers, dancers, and other normal independent contractors are being argued as employees. All businesses should have their tax attorney review there employee and independent contractor agreements and documents.

Obama Administration Attacks Small Business The Obama Administration's new Labor Secretary, Hilda Solis, screamed to Union workers "You can rest assured that there is a new sheriff in town." Solis proclaimed at a recent AFL-CIO conference that she is going to radically step-up enforcement of the anti-employer wage and hour laws. Even though the Bush Administration started a record number of Fair Labor Standards Act (FLSA) claims over the past few years and jaw-dropping wage and hour settlements (the average hovering around $24M), Solis is set to hire 250 new wage and hour field investigators. Further, President Obama hopes to increase the Depart of Labor funding for 2010 by $600M. In short, the government is pushing for a major overhaul of wage and hour law enforcement to attack more small businesses. The government declared more than 70% of employers are estimated to be routinely violating wage and hour laws. Businesses should call their lawyers now to make sure they...

 Smaller companies were audited 41 percent more often in 2007 than in 2005, and companies with $10 million to $50 million in assets were 29 percent more likely to be audited in 2007 than 2005, according to a study by Syracuse University's Transactional Records Access Clearing House. Meanwhile, the TRAC study showed that companies with more than $250 million in assets were nearly 40 percent less likely to be audited than in previous years. Click Here for the full article.