CPA Observation Post

Small businesses fear IRS audits could invade customer privacy (from @WSJ)

The Internal Revenue Service plans tax audits on small businesses that could lead to the release of unrelated or confidential information, according to the AICPA. The IRS asks small enterprises to surrender "exact" copies of electronic records, which could contain private customer data. Unlike large companies, small businesses don't use sophisticated business software that they could immediately supply the IRS with the information that it needs. Read More>>

Tax Break for Self-Employed Likely to Vanish

The Small Business Jobs Act nixed the tax that self-employed workers pay on health insurance for 2010. Small biz advocates doubt Congress will extend it. Read More>>

Survey: Tax season is a drain on small businesses

Nearly 90% of small businesses have to hire outside help to complete their tax returns, according to a survey by the National Small Business Association. Some business owners said it takes up to two weeks to prepare their returns, with payroll taxes accounting for much of the work. The complexity of the federal tax code is taking up too much of small businesses' resources, the NSBA says. Read More>>

Report questions IRS' focus on small businesses

Small businesses are bearing the brunt of efforts by the Internal Revenue Service to boost tax receipts, according to a study by the Small Business Administration's Office of Advocacy. The IRS has introduced proposals, including increased audits, designed to recover billions of dollars in unreported tax liabilities. Read More>>

How to pay for 1099 repeal still in discussion

Senate Democrats are planning to propose a new way to pay for a repeal of the provision in the health-care law that requires small businesses to issue 1099 forms to suppliers, according to Majority Leader Harry Reid, D-Nev. Reid supports the language in the bill passed by the House but plans to offer an amendment to a small-business bill pending in the Senate that would be an alternative. Read More>>

New Jersey makes another bad list: 2nd worst state for entrepreneurship/small business

The Small Business & Entrepreneurship Council’s “Business Tax Index 2010” ranks the states from best to worst in terms of the costs of their tax systems on entrepreneurship and small business. The Index pulls together 16 different tax measures, and combines those into one tax score that allows the 50 states and District of Columbia to be compared and ranked. New Jersey was the 2nd worst state, according to the study. See the full list.

In a related story, according to the Kauffman Foundation’s Index of Entrepreneurial Activity, entrepreneurial activity in New Jersey appears to have declined last year, putting the state well behind the national trend. Read More>>

1099s: House and Senate Ping-Pong Hated Small Biz Tax Rule

The House and Senate are at a stalemate when it comes to getting rid of a hated small business tax reporting provision. While lawmakers in both parties of the House and the Senate want to repeal the so-called 1099 reporting rule, calling it an onerous provision that will break the back of small business, nobody is able to come up with an actionable plan to pay for the measure. Read More>>

PCAOB Plans Small Business Auditing Forums for 2011

The Public Company Accounting Oversight Board plans to hold seven forums -- the first in Boston on April 28 -- to discuss auditing small businesses. "The 2011 program will target some of the special challenges that the board's inspection program has highlighted in smaller company audits," says PCAOB member Daniel Goelzer. Read More>>

Small and Midsized Accounting Practices Expect Bounce This Year

The effects of the financial crisis continue to be felt by small businesses, according to small and midsized accounting practitioners recently polled by the International Federation of Accountants, but they believe this year will be a better one for their firms. Read More>>

Senate votes to repeal 1099 reporting requirement

The Senate has approved a measure that would repeal the expanded Form 1099 reporting requirements that were part of last year's health care law. The move has broad support because the Form 1099 rules, which are set to require businesses to report any purchases of more than $600 of goods and services from vendors in a year to the Internal Revenue Service, are expected to increase accounting costs for small businesses. Read More>>