A Word to the Wise - Part 2

We did a posting back in February about how the IRS and several states were starting to scrutinize  companies that were changing the status of employees to independent contractors mainly for tax purposes. If you missed the posting or would like to refresh your memory you can read A Word to the Wise here. Now comes a new article titled The IRS Picks on the Little Guy from CFO.com how the IRS has reduced the amount of time they plan to spend on auditing large companies and plans to increase audits on small businesses. 

The article describes how the Transactional Records Access Clearinghouse (TRAC) conducted a study with the results that 20 years ago two out of every three large company returns were audited by the IRS. By 2005 it had dropped to 43 out of every 100 returns and by 2009 it had plummeted to 25 out of every 100. You can read the whole article for all the rationale behind the changes.

The real irony in these changes is near the end of the article where it makes the point that politicians in Washington are always making speeches on how small businesses are the foundation of job growth, yet in these  difficult times the IRS is targeting them for increased tax scrutiny. After all it is a little difficult to fully concentrate on growing your business when your in the middle of a tax audit (or just worrying about one on the horizon).

Comments

[New Jordans]

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