QuickBooks and the IRS, Free E-Book

Filed in Intuit QuickBooks, Tax, Savings by on March 18, 2011

I was studying QuickBooks and the IRS before there was a QuickBooks. The issue is broader than QuickBooks and the IRS. It is what part of your business books and record can IRS get? The answer is all of them.

Big businesses, big business CPAs and the IRS litigated this extensively. Only individuals (not corporations) have Fifth Amendment privileges against self-incrimination under the U.S. Constitution [19, ^ U.S. v. Kordel, 397 U.S. 1 (1970)]. Big business CPAs often have extensive papers documenting their income tax accruals. These documents are the property of the CPAs, not the company. They may reflect questions about tax deductions, so the IRS wanted them. CPAs have state rights to confidentiality, but the U.S. Supreme Court decided the IRS could get even these records. Claiming your Fifth-Amendment rights also can target you for an intense Internal Revenue criminal exam.

QuickBooks and the IRS is simply an extension of the rules concerning total access to business records. However, QuickBooks and the IRS is a big issue because income tax compliance costs are especially brutal for small businesses. Corporations with assets of less than $1 million (more than 90% of corporations) pay $382+ in compliance costs for each $100 in income tax. Small businesses create 80% of net new jobs, so we all should spend a few seconds to email (web mail) Congress to scream for the Fair Tax. It cuts these costs by 95%, while solving balance of payments problems, creating a job boom and substantially eliminating IRS.

Thanks to Obamacare, businesses are already spending an extra $100+ billion a year in 1099 costs. This will cost IRS $25+ billion, compared to the less than $2 billion they dreamed of collecting from tax evaders. Obama also now has IRS targeting small business S corporations (around 95% of corporations) with 14,000 new agents. This will triple the number of S corp exams, targeting owner salaries and 1099s. That is why we now have a 1099 e-file program, which gives us an extra month to file on time.

IRS can penalize you up to $250, and disallow related deductions, for each 1099 not filed. Without my long-form independent contractor agreement, IRS also may often add more than 60% in extra payroll taxes (plus penalties and interest) to amounts claimed on “1099 employees” (Never use that term. Search 1099 employees, in this QuickBooks-Blog, to see why. You also can download my free independent contractor agreement).

These are only some of the reasons that informed CPAs and business owners now worry so much about QuickBooks and the IRS. We already know that QuickBooks and the IRS means IRS exams may include demands for your QuickBooks file. QuickBooks and the IRS BEGAN with 2,000 IRS QuickBooks specialists, in 2,000 exam groups. QuickBooks and the IRS will let your small business exam quickly compare details by month and to prior years. This will make QuickBooks and the IRS exams mean much more extra taxes, penalties and interest. QuickBooks and the IRS also may mean you may start by paying around $2,500 to split your QuickBooks file by year, to minimize extra exam taxes costs.

Here is an additional free e-book on QuickBooks, the IRS and you. It comes from long time friend Nancy Smyth, who always does quality work.

Download Qb_irs_you



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Fastest, easiest, accurate, low-cost QuickBooks! Intuit - QuickBooks CEO, "You're fantastic Mike! Absolutely fantastic!" Tax fighting CPA.

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