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Daily Real Estate News  |  May 26, 2011  |   IRS Demands More Info From Small Businesses
The Internal Revenue Service is asking small businesses that are audited to produce exact copies of electronic records kept in their business software programs, The Wall Street Journal reports.

Many small business owners are upset at the extra request, saying this will force them to turn over customer lists, confidential client information, and other unrelated information contained in the off-the-shelf accounting software programs that many small business owners typically use. Small business owners argue that the IRS is treating them like large companies, which tend to have more elaborate accounting systems that can extract precise data more easily.

"Many accountants are worried this could lead to fishing expeditions" to find other problems beyond the requested information, Danny Snow, a certified public accountant in Memphis, told The Wall Street Journal. "It's not like what the IRS asks of large companies."

The IRS has been increasing its number of audits in recent years, and small businesses are often a target. The IRS claims small businesses make up the largest segment of those who tend to owe more on taxes than paid because of noncompliance with the tax laws.

Source: “Small Businesses Fight IRS Over Data,” The Wall Street Journal (May 26, 2011)

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