Robert J. Fedor, Esq., L.L.C.

Does the IRS target small businesses for audits, criminal cases?

There are many small-business owners in Ohio who have worked very hard to build and maintain a successful company. But running a business can come with a huge number of challenges and expectations that go far beyond having a good product or idea. There are employment requirements, insurance payments and tax laws that must be considered, and this can all be quite complicated. So it is not unreasonable to assume that some small business owners make some mistakes when they are starting or growing a business because they are unsure of what to do or try to make the most money they can.

Unfortunately, these small businesses are often in the crosshairs of the Internal Revenue Service for these very reasons. According to a recent report, there has been an increase in the number of times the IRS has initiated criminal cases against small businesses because of tax violations. It is also argued that these small businesses are audited more than others.

Some people assume that small businesses or people who are self-employed may be more likely to skirt tax laws or fail to pay taxes altogether because their business practices are not as publicized as those of larger companies. However, we have seen companies of all types and sizes who end up facing criminal charges for tax law violations or hefty fines after an IRS audit.

It is also argued that smaller businesses do not have the funding or resources to appeal IRS actions or put up a fight, which makes them even easier to target.

But if small businesses are being unfairly targeted by the IRS, that should raise some concerns for people in Ohio who run their own business. Being audited or facing criminal penalties for tax violations can be devastating to both a business owner and a business. But it is important to remember that there are ways to protect both. Speaking with a tax attorney can help individuals and businesses identify these solutions and work to resolve them.

Source: Bloomberg Businessweek, "How the IRS Thinks About Small Business Tax Scofflaws," Patrick Clark, Sept. 26, 2013

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