Small business owners have more reason than usual to be nervous about opening their mail for the next few years thanks to the IRS’s Employment Tax National Research Project (NRP).
The NRP is a comprehensive audit that will hit 2,000 small companies each year at random in 2010, 2011 and 2012. The goal is to see how well businesses are complying with employment tax regulations. The last NRP was conducted 25 years ago, and with the federal government seeking all possible sources of revenue it can, the IRS is looking to make sure it’s getting all the money it’s owed by small business taxpayers.
The NRP is honing in on four areas:
- Worker Classification
- Executive compensation
- Fringe benefits
- Payroll taxes
The IRS has stated these audits will be “comprehensive” and if you are hit with one, be ready to open all your records. However, you don’t have to get audited to be affected by the NRP: The results of the completed study will be used to adjust tax regulations and tighten up compliance in these four areas above.
Don’t wait to get audited—make sure your company is in compliance.
