Disturbing News for Small Business: IRS increases audits by 30%
Trends show the IRS is spending more time auditing small businesses while decreasing the number of audits for large companies. According to the study, auditing small businesses helps IRS agents meet performance goals. However, these small business audits do not help the IRS collect more revenue or uncover more misreported income. Focusing on small business audits can be detrimental in many ways. First, an audit of a small business typically requires time and effort from the business owner. In addition, while the government is currently attempting to stimulate small-business job creation with tools such as tax credits, news that the IRS is focusing disproportionately on small businesses may scare businesses away from using available tax credits. For additional information on the study go to Small Business Trends.