How is the IRS Helping Small Business?
Bobby Hunt is the Director of Taxpayer Education and Communication for the Small Business/Self-Employed Division of the IRS, a position he has held for the past three years. The SB/SE Division serves approximately 46 million taxpayers. Mr. Hunt has been with the IRS for 25 years. The following is based on an interview with Mr. Hunt.
Getting answers
Eighty percent of small businesses rely on tax practitioners to complete their returns. But questions arise throughout the year on how to handle various situations. Owners can turn to their tax experts and pay their fees or may find the answers they seek from the IRS for free. Small-business owners can find quick answers to common questions through the IRS Web site created for the SB/SE Division (www.irs.gov/businesses/small/indes.html). For example, information on starting, operating and closing a business, as well as obtaining an employer identification number is a click away (37.5% of all EINs are now obtained online).
For information not provided on the Web site, owners can call the IRS at 800-829-4933.
Filing returns and paying taxes
Filing returns electronically can save business owners time and money, ensure accuracy and provide peace of mind. Now all business income tax returns can be filed electronically – corporate returns can be e-filed, but many of the necessary forms and schedules will not be available until mid-year, so filing extensions for those who wish to use this filing method may be necessary.
Employment tax returns – Forms 940 and 941 – can also be filed electronically.
Paying taxes online can be a help; you can schedule payments in advance and verify that they have been credited to your account. Go to www.eftps.gov.
Note: EFTPS Express Enrollment is open to all new businesses when applying for employer identification numbers. These businesses will automatically receive by mail their EFTPS Personal Identification Number (PIN) and instructions for activating EFTPS enrollment.
Staying compliant
A key goal of the Director of Taxpayer Education and Communication is helping taxpayers to comply with their tax obligations. Toward this end, the IRS has launched a number of projects:
- Virtual workshops, where small-business owners can take any or all of 40 modules, on such topics as setting up a business, payroll and estimated taxes, at their convenience. These online modules can be accessed 24/7 (at the SB/SE IRS’s Web site, go to “online classroom”).
- Small Business Resource Guide, a CD-ROM from the IRS, SBA and other federal agencies that provide a wealth of accessible information.
- Local workshops conducted in conjunction with local chambers of commerce, CPA societies and the National Federation of Independent Business (NFIB).
Looking ahead
Call 2004 the year of technology. Expect to see a growing array of e-services that can benefit small businesses. Tax professionals will be able to complete authorization forms (powers of attorney) online and use electronic account resolution to handle client inquiries – time savers for tax professionals that translate into dollar savings for their small-business clients.
The IRS is also working at burden reduction to cut the time it takes to complete and file returns. Examples:
The IRS has already provided a standard meal allowance for child care providers to simplify their recordkeeping. Instead of tracking every meal and snack given to children in their care, providers can use a fixed writeoff for meals and snacks.
Businesses with up to four vehicles are now permitted to use the IRS standard mileage rate when deducting car expenses – a simplification expected to benefit up to 800,000 small businesses.
