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Taxes, ReceiptsAbsolutely nothing! Sometimes you may feel like a little fish in a big sea of taxpayers. But the IRS will be the first one to tell you they do not participate in the practice of  phishing. . You might think I made a spelling mistake there,  but “phish-ing” is defined as the fraudulent practice of sending e-mails or making phone calls that look like they are from legitimate companies. They are really from criminals who want to trick you into revealing personal information. You actually wind up giving them permission to steal your identity and steal your money. . If the IRS wants to contact you, they will send you a letter first. If you are being audited, the IRS will tell you they will NEVER make their first contact by email or by telephone. . Recently small business owners are nervous about the new mail campaign IRS is making. IRS is sending letters to small business owners all across the country. They want to know if you have reported all of your cash sales. . This letter is NOT the beginning of an audit. They are looking for business owners that know they haven’t reported all of their income. If that is you, you have this opportunity to come forward, to “fess up”, to confess that you actually do have more income to declare. . According to one news report, the headline on one IRS letter reads “Notification of Possible Income Underreporting.”  It notifies the business owner “your gross receipts may be underreported.”  It then says you must complete a form to explain why your income from customers not using a credit card “appears unusually low.”  The words “non-credit card sales” means “cash” sales to me. Read my blog from last week on the important practice of depositing all of your business income to your business bank account. . I’ve said before and I will say it again…when it comes to the IRS, it is up to you to prove you are right. Unlike criminal law, in tax law the IRS assumes you are guilty before you prove you are innocent. This means the burden of proof is on you, the taxpayer. . So when you get a letter from the IRS, open it. Find out exactly what they want. Pay attention to the response date they would like to hear back from you. They will always include a address for sending mail to them and a phone number in case you want to call them. . If you do call them, YOU are initiating the telephone contact. And when you give the IRS your phone number, they may call you back. That return phone call from the IRS is NOT phishing. It is in response to you reaching out to them. . Rest assured, If you dot your “i”s, cross your “t”s, cover your  bases and play by the rules, you will have nothing to worry about.  That does not mean pay more tax than you have to…it means pay only your fair share and not a penny more.
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