November 10, 2014
NSA was invited by the Government Accountability Office (GAO) to discuss a range of tax compliance burdens of small businesses, from the tax practitioner perspective. NSA members provided feedback on a number of burdens placed both on the small business owners, and also, in turn, on the practitioners to provide the best service while keeping their clients compliant.
Among the points discussed with the GAO staff were the following:
Problems caused by the short filing season. We discussed the time demands placed on practitioners due to new filing requirements such as the Affordable Care Act, not receiving necessary tax documents until late in the filing season, IRS requests to have preparer visits during the filing season, and the inability to get through to IRS in an efficient manner.
Penalties
There is a growing trend toward automatic penalties preparers even as the demands on preparers continue to increase. The NSA panel felt that exceptions should be made for smaller businesses, particularly in light of the inability to efficiently get through to IRS personnel.
1099 Concerns
The complexity and changes in the various 1099 forms make it difficult to get them completed on time. The 1099 K Pilot Program raises concerns for tax practitioners because the gross amount reported in credit card sales may include some items (tips, additional amounts charged in order to get cash back, etc.) that are not income to the business. Small businesses are routinely asked about underreporting in this area. In turn, tax practitioners are caught between small businesses that believe they have accurately reported their income and the IRS, which believes the business is cheating.