The goWholesale Blog

Whose Side Is Your Accountant Really On?

April 10th, 2008

How would you feel about hiring an accountant who puts the interests of the IRS before those of you or your business? What’s that you say? You wouldn’t like it? That’s what I thought you’d say…but what if I told you you had to?

Unfortunately, that may be the case.

(I mean, I won’t force you to but a much stronger influence might…what was their name again?…..oh right! The Government.)

The Small Business and Work Opportunity Tax Act of 2007 stipulates that those who prepare returns containing an understatement of tax due - which the preparer “knew or reasonably should have known” - will be subject to penalties amounting to “the greater of $1,000 or 50% of the income” the preparer received for that particular federal return.

The act also expands the definition of tax-return preparer to cover those handling any federal return, including those for estate, gift, excise, and employment tax.

According to a recent Fortune Small Business article there are a bevy of downsides to this new legislation including:

So it sounds a bit like intimidation doesn’t it? And it would appear that the government would end up with a lot of free (and somewhat covert) auditors. How do you plan to handle this new legislation? Are you going to write your congressman? Did you even know this tomfoolery was afoot?

And for those of you who do end up getting audited this tax season (for real) check out How to Survive an Audit of Your Business- And Live To Tell About It

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Posted in Finance and Accounting |

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