IRS Small Biz Webinar

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For me, Small Business Week sort of came and went this year with little notice.  In fact, I just now got around to watching the IRS webinar that came out on May 15th called “Avoiding the Biggest Tax Mistakes.”  The video is now archived and available through the IRS video portal here.

This video may be useful for young entrepreneurs and teenagers who are interested in one day having their own business.  I say this because it just scratches the surface of business tax knowledge, and anyone who has already begun operating a business absolutely must understand these basic principles.  The entire video runs about 42 minutes in length; the first 15 minutes cover the bullet-point topics below, and the balance of the video is a live Q & A session:

  • Keep good records (three years is the general rule)
  • Report all taxable income (all income is generally reportable unless specifically excluded by law)
  • Keep business and personal expenses separate
  • Choose your tax preparer carefully (be skeptical of promises of outcomes that seem too good to be true)
  • Always review your tax return for accuracy
  • Consider e-file options
  • Do your homework
  • Don’t fall prey to tax scams

When asked what he thought should be the main “take-away” points from the webinar, the presenter emphasized the importance of the first three (keeping good records, reporting all income, and claiming only business expenses on Schedule C).

Another point that was mentioned is that too many small business owners rely on word of mouth when it comes to business “write-offs.”  Just because a buddy writes off a certain expense every year doesn’t mean it is legitimate.  One real-life example of this is the rumor that you can put your file cabinet in one room of your house, your desk in another, your printer in another, etc. and basically claim the entire square footage of your home as “business use.”  It doesn’t even make sense that the IRS would agree to this, and that should be the first indication that it is bogus.

Not everybody has a very good feel for what “seems” right or wrong, so that’s why it is critical to seek sound advice from a respected tax professional.  When it comes to running a small business and avoiding IRS scrutiny, it is never a good idea to “shoot from the hip.”

Upcoming IRS Webinar

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The IRS has gradually revealed some important changes to its tax collection procedures over the last several months under the “Fresh Start” program.  What began as a patchwork of provisions scattered here and there, has now been organized under its own tab on the homepage of the IRS website.   Most of the changes are now in effect, even though they have not made their way into the Internal Revenue Manual yet (see Interim Guidance Memo on changes to Offer in Compromise process).

In an effort to provide further guidance regarding the IRS Fresh Start program, the IRS is offering a free webinar on September 12th.  The webinar is entitled “Payment Alternatives – When You Owe the IRS,” so it is not 100% focused on Fresh Start.  It is supposed to cover Installment Agreements, Currently Not Collectible Status, and Offers in Compromise, hopefully presented through the lense of the Fresh Start program.  One of the bullet points is “Fresh Start enhancements.”

The presenter for this webinar will be Traci Suiter, Lead Public Affairs Specialist of the Small Business / Self-Employed division of the IRS.  Other IRS representatives will participate in a Q&A segment.

IRS Fresh Start Webinar

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The IRS webinar detailing their Fresh Start Initiative, which originally aired on August 31, 2011,  has been posted to the IRS video portal for all to see.  The Fresh Start Initiative is a tax reliefprogram designed to help taxpayers who are struggling to meet their tax obligations in this down economy.

As part of the initiative, the IRS has adjusted its lien filing procedures, opened up the installment agreement option to more businesses, and  instituted a “streamlined” Offer in Compromise program. I was hoping the IRS would, through this webinar, elaborate on the Fresh Start program and provide more details on exactly how these changes will impact taxpayers with balances that they cannot immediately pay. But they didn’t. Instead the speakers rehash what has already been explained on the IRS website and then go into a fairly detailed discussion of liens.

This is a good video for someone who wants a basic understanding of liens, how & why the IRS files them, and how to get them released. The IRS representatives even go into an explanation of lien “release” vs. lien “withdrawal,” complete with an analogy comparing it to a “divorce” vs. an “annulment.”

Unfortunately, very little was said about the changes that have been made to the Offer in Compromise program either. Click here to see the entire video.

Don’t Miss August 31st IRS Webinar

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On February 24, 2011, the IRS announced its “Fresh Start Initiative” which consists of changes that are supposed to soften some of the collection practices, and provide at least some tax relief to Americans who are struggling to pay their taxes. So far we know that the IRS has made adjustments to their lien filing procedures, which is supposed to result in fewer lien filings. The IRS is making it easier for small businesses to pay back what they owe through Installment Agreements. And the Streamlined Offer in Compromise should be in full swing by now.

However, several ambiguities are present in the Fresh Start Initiative. And while these changes are supposed to help the struggling taxpayer in theory, we have yet to see the real life impact.

But the IRS speaks again on the matter next week by webinar. Maybe we’ll get a few more details, or examples, or something. If you want to participate, you need to register online here: IRS Live presents: “The Fresh Start Initiative — Help for Struggling Taxpayers.” The webinar will take place Wednesday, August 31st at 2:00pm EST. There will be a panel of speakers, so hopefully that means it’s not a rehash of what the IRS has already revealed about the program.