Released: April 13, 2006

Increased IRS scrutiny for small businesses?

Source: By Dalia Naamani-Goldman, Medill News Service [Sun-Sentinel]

For a growing number of small business owners, the 2005 tax season may mean a visit from the Internal Revenue Service.

The agency is stepping up its auditing this year, focusing on filings often associated with small businesses in an effort to close the tax gap. The IRS estimates the gap - the difference between what should be collected in taxes and what actually is paid - at about $345 billion.

While filings from small businesses made up 58 percent of all corporate returns filed in 2003, less than 1 percent were audited last year, IRS Commissioner Mark Everson told Congress last week.

Advocates for small businesses say small businesses are being unfairly singled out because they’re easier targets than larger ones.

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