Archive for June, 2011

A New Threat To Small Businesses By The IRS

June 3, 2011

Small businesses face a growing threat to their firms from the IRS.
The tax-gathering government arm is requiring small firms to turn over the entire transaction and management files during audits.
Put simply, the IRS wants firms under audit to provide full copies of their Intuit and other programs they use to manage their business affairs.
The IRS wants these files so that it can better examine the inner workings of companies and to see if expenses are properly allocated.
However, what this would do in reality is provide the IRS with customer lists and other sensitive information.
The IRS says it will keep such information secure and private but there are no guarantees.
Small business groups are up-in-arms about this requirement.
They point out, as the Wall Street Journal reported, that large companies have sophisticated programs that keep the data separate.
Smaller firms, who use Intuit and Peachtree software among others, do not have such luxury.
The two providers say they are looking at the problems, but right now, this newest IRS move may cause considerable heartache to smaller enterprises in the near term.
It is an issue that needs to be resolved quickly and no matter what happens, makes more work for smaller companies at a time when they are faced with numerous other problems.
Concerned managers should contact their management software provider to learn what they are doing about this matter.