Robert Flach announces his publication of a new newsletter for sole proprietors and single-member schedule C filers entitled, aptly enough, The Schedule C Letter: THE SCHEDULE C LETTER is a bi-weekly newsletter that provides tax planning and preparation advice, information, and resources for sole proprietors and one-person LLCs who report their business activity on IRS Schedule C.¹ I have [...]
Tags: Business advice · C Corporations · S Corporations · Self-Employed Taxpayers · Tax Tips
Frequent readers of this blog know that we have maintained - ad nauseum, I am sure, for some – that all small businesses should incorporate or operate as an LLC in part because they are less likely to undergo IRS scrutiny. Well, if you can believe the Government Accountability Office GAO), this may all be about to change. WebCPA [...]
Tags: C Corporations · IRS Audits · S Corporations · Self-Employed Taxpayers · Unfiled Returns
Every year the IRS publishes audit statistics showing that it audits S Corporation returns much less frequently than it audits sole proprietorship (schedule C) returns. Consequently, one of the factors business owners and their advisors have traditionally considered before choosing a form of business is the relative likelihood of IRS scrutiny of the business’s tax return. No surprises there, right? Well, not so fast. Last [...]
Tags: IRS Audits · S Corporations · Self-Employed Taxpayers
The National Association for the Self-Employed reports that the recently enacted Healthcare law will have an onerous record-keeping effect on small businesses: Many of the nation’s entrepreneurs are about to become more familiar with IRS Form 1099. According to a new law set to go into effect in 2012, business owners will be required to submit a [...]
Tags: Business Transactions · C Corporations · IRS procedure · S Corporations · Self-Employed Taxpayers
In a summary opinion issued yesterday the Tax Court held that an IRS revenue officer failed to substantiate expenses she claimed in her eBay business.¹ Below is an excerpt from the Court’s opinion in Orellana v. Commissioner, T.C. Summ. Op. 2010-51 (Apr. 20, 2010). The IRS agent/taxpayer’s admissions are stunning (emphasis added): Petitioner argues that she was [...]
Tags: Gross Income · Self-Employed Taxpayers · tax court
We didn’t need it, but here is more evidence that self-employed individuals should incorporate or form an LLC. WebCPA reports that the IRS is intensifying it’s scrutiny of Schedule “C” filers (i.e. sole proprietorship): Estimates by the IRS show that $68 billion of the $345 billion tax gap in 2001 was due to the underreporting of income [...]
Tags: Self-Employed Taxpayers · Tax Tips
Thursday, October 15th, is the last day taxpayers can file their 2008 individual income tax returns without incurring a late filing and late payment penalty. But what do you do if you don’t have all of the information necessary to complete your return? Many unincorporated, self-employed taxpayers fail to keep adequate books and records from which a business [...]
Tags: Deductible Expenses · News · Self-Employed Taxpayers
