Tax Implications of Selling A Small Business
April 15, 2011

Don’t Become a Victim of the “Dirty Dozen”

Its Tax Season! This time of year the IRS wants taxpayers to be aware the “Dirty Dozen” tax scams. These scams are illegal and can lead to problems for taxpayers including significant penalties, interest and possible criminal prosecution. Every year the IRS highlights the most prevalent of these scams, including: return preparer fraud, filing false or misleading reports, identity theft, and frivolous tax arguments.

Here are some important guidelines you should keep in mind:

1. YOU are responsible for the content of your tax return and YOU are liable for the consequences that flow from the information that is reported.
2. NEVER sign a tax return without reviewing it to ensure that it is honest and accurate.
3. If it sounds too good to be true, it probably is! Anyone who tells you they can get you a huge refund before they know you situation or tries to convince you that income tax reporting requirements don’t apply to your situation should be immediately suspect.

Of course, sometimes the person who can put you in hot water is no stranger, but a current or former spouse. Many times one spouse is in the dark about the family taxes and simply signs their name on the return at the insistence of a loved one, only to find out later that they are now liable for a huge tax bill!

Thankfully, the IRS provides for innocent spouse relief. By requesting innocent spouse relief, you can be relieved of responsibility for paying tax, interest, and penalties if your spouse (or former spouse) improperly reported items or omitted items on your tax return. If you qualify for innocent spouse relief then these taxes, interest, and penalties can only be collected from your spouse (or former spouse).

If you find yourself the victim of a tax scam or in need of innocent spouse relief, contact our office to see how we can assist you today.