There are many great things about being your own boss and owning your own Oklahoma business. As a sole proprietor, you may be able to make the business whatever you want it to be, you may be able to make your own hours, and you may have unlimited income potential. However, with those benefits come risks. There may be times when money is short, and difficult decisions need to be made. There may be times when you make mistakes intentionally or unintentionally.
What Happens When the Mistakes Occur With the IRS?
Some mistakes can be easily fixed, and others can be more difficult. If you have a tax problem with the IRS, then it is important to deal with it as soon as possible to keep the interest and penalties from compounding and making your potential tax problem worse. Two of the problems often seen with sole proprietors in Oklahoma and around the nation are:
- Under-reporting of income. If income is not accurately reported, then tax liability cannot be accurately assessed. Thus, if you don't report all of your income, then IRS may come after you for back taxes with interest and penalties.
- Over-reporting of deductions. If you report more deductions then you really had, then your tax bill may be lower than it should be—which means you may not have paid your full tax liability to the IRS. In this scenario too, the IRS may come after you for back taxes with interest and penalties.
The IRS expects that you are going to accurately report your income. If you have made a reporting error, or if you have intentionally tried to lower your tax burden, then you may have a serious problem that could result in significant financial penalties and other legal consequences.
Call an Oklahoma City Tax Attorney Today for More Information
If you are an Oklahoma sole proprietor or small business owner, then we encourage you to find out more about what to do if you have IRS problems. Please contact our experienced Oklahoma City tax lawyers today at (405) 703-5689, and please read our FREE book, The Ultimate Survival Guide for IRS Problems, to learn more.