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SAN DIEGO, CA, April 12, 2014 /24-7PressRelease/ -- The small business owner is coming under scrutiny by the IRS at a time when many believe they are finally seeing a recovery from the economic recession. San Diego bankruptcy attorney, Paul Staley, is seeing a rise on calls from Mom and Pop business to help with and IRS audit..
After persevering through the most difficult economic downturn in recent history, the struggling small business entrepreneur is being inundated with IRS audits. According to bankruptcy attorney, Paul Staley, "The recession has hit small business owners as hard as anyone. Some think they're seeing light at the end of the tunnel," but Staley reports that 20,000 small business owners recently received an ominous letter from the IRS entitled, "Notice of Possible Income Underreporting." What this means for taxpayers is they now have "the burden of convincing the IRS that their numbers are sound." Staley expects the number of letters going out to taxpayers will continue to grow.
This increase in audits is a direct result of a change to the 2011 tax code. Credit and debit card processors are now required to report to the IRS and issue form 1099-K to taxpayers. Tax returns are then scored for possible noncompliance issues, or underreporting of cash payments. Staley understands the trend toward online sales and the 1099s reporting gross sales including sales tax often means a small business owner has legitimate reasons for inconsistent cash to credit card payment ratios.
With this increased IRS scrutiny of small business owners, it is important that taxpayers do not panic. Along with the letter comes a form to be filled out and returned, and the IRS allows 30 days for the taxpayer's response. Paul Staley elaborates, "I've gotten more calls from small business owners with tax worries in the last ninety days than I received in the previous two years. When the recession was in full swing, they were robbing Peter to pay Paul, hoping for a brighter day. For some, those hopes are darkened by the specter of the IRS mounting an offense against them." The worst thing a taxpayer can do is ignore the IRS letter because there definitely is hope.
As San Diego small business owners struggle with IRS audits, it is important they seek help" the most common thing to due is ignore the problem" Staley said. The actions necessary to rectify issues with audits and tax obligations is an involved process that takes professional knowledge of the tax code. It is important to seek advice from a San Diego attorney that does not have a stake in the small business in question because this ensures an objective perspective. It takes time and experience to help make the right decisions with regard to tax matters.
San Diego bankruptcy attorney, Paul Staley, has a comprehensive understanding and knowledge of the IRS tax problems. He is available to assist the San Diego small business owner with IRS issues.
The Law office of Paul Staley is a boutique law firm in San Diego CA. They have over 24 years experience in bankruptcy law.
MEDIA CONTACT INFORMATION
Law office of Paul Staley
San Diego, CA 92108
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