So, this is flying under the radar in the ending of 2020 … an IRS official just publicly stated that they are massively ramping up audits next year.
It was at an event for the AICPA (American Institute of Certified Professional Accounts), and it happened Tuesday:
“The IRS is focusing our efforts to increase compliance activity in this area of not only partnerships, but also investor returns related to pass-throughs,” said De Lon Harris. (He is the IRS deputy commissioner of examination for small businesses).
He said that for 2021, “we are planning for 50% more than we had in the previous year.”
The IRS is hiring 50 more specialized auditors to work these cases, with the aim of having them in place by February.
So what does this mean for you?
Well, if you got in hot water in the past … expect that there might be more ahead.
If you have outstanding issues with the IRS … expect that the heat WILL turn up on those.
Last year is NOT a good guide.
In fact, it’s not “just” the IRS that you have to worry about.
If you received funds from the SBA for your Los Angeles County business (PPP or EIDL), even though the forgiveness process might have been smooth, or it looks to be smooth, there will be pressure on the SBA to root out fraud and non-compliance on that front as well.
This (among many reasons) is why we are here.
You don’t have to navigate these waters alone.
Now is the time to get ahead of the game, and get the pros in your corner:
Oh, and one last thing: very (very) last minute, year-end tax moves, in case you hadn’t seen these…
1) Use Your FSA Funds
2) Make an Extra Payment on Your Mortgage
If you own a house with a mortgage, and you can swing the cashflow hit, add an additional payment before year-end, and the interest on that payment will be deductible for 2020.
3) Make the Switch to a Roth IRA
Roth conversions are taxed in the year the conversion happens.
4) GIVE (even if you’re facing difficulty)
This week, of course, is a big one for Los Angeles County non-profits who are the happy beneficiaries of our last-minute donations. And with the $300 deduction available even for those who take the “standard deduction”, your money goes even farther. Please, if you can, give.
We’re in your corner.
Victor M. Quinones
Quinones & Co., Inc.