IRS Audits Are On the Rise

Would your books hold up if you were audited? Are you prepared? IRS business audits are on the rise, especially for Partnerships and S-Corporations, which means the likelihood that you’ll be audited during the lifetime of your business is greater than ever before. A solid accounting system and good financial documentation not only help your business run smoothly, they’ll keep you out of trouble if that dreaded letter comes in the mail. If you are faced with an audit, give us a call. We’d be glad to represent you and make the audit as stress free as possible.

Employers are facing higher penalties for hiring illegal immigrants.

U.S. Attorney General Michael B. Mukasey has recently announced that civil fines imposed against employers who violate federal immigration laws will be increasing by as much as $5,000, effective March 27, 2008. The new rule will soon be published in the federal register. Under the Immigration and Nationality Act, employers who violate employment eligibility requirements are subject to civil monetary penalties. Employers may be fined under the Act for knowingly employing unauthorized aliens or for other violations, including failure to comply with the requirements relating to employment eligibility verification forms, wrongful discrimination against job applicants or employees on the basis of nationality or citizenship, and immigration-related document fraud. The new rule and applicable laws will adjust the civil penalties for inflation. The average adjustment is approximately 25%. The minimum penalty for knowing employment of an unauthorized alien will increase from $275 to $375. The maximum penalty for a first violation will increase from $2,200 to 3,200. The biggest increase under the new rules will raise the maximum penalty for multiple violations from $11,000 to $16,000. The penalties are assessed on a per-alien basis. Thus, if an employer knowingly employed, or continued to employ, five unauthorized aliens, that could result in five fines. The last time that these penalties were adjusted for inflation was in 1999.

Tips for Choosing a Tax Preparer

Choosing the right Tax Preparer is an important decision for a small business owner. Taxpayers are legally accountable for the information on their tax return, so it is important to find a qualified tax professional if you need help filling out your returns. Consider the following when choosing a tax professional that will work best for your business:
· Be wary of tax preparers who make promises before they have reviewed your financials. Not everyone is entitled to a refund.
· Your tax professional should be up to date on all licensing and registration requirements in your state. Do not hesitate to check with the Better Business Bureau, the state’s board of accountancy (for CPAs), the IRS Office of Professional Responsibility (for other tax preparers), or any other agency that is responsible for registering tax preparers in your state.
· Not all small businesses tax returns are the same. Your preparer will need as much information about your financials as you are able to provide. A good tax preparer is thorough and does not cut corners and put your business at risk.
· Tax professionals who belong to professional organizations are required to meet certain continuing education requirements and are held to a high standard of ethics.
· Ask who will actually be preparing your return. Some tax preparers pass your return off to someone else in their office, or even outsource the work overseas. It is important to know who filled in the information on your return.
Remember that you are ultimately held responsible for your tax return. Finding a preparer you can trust can save you hassle down the road.