Legislation affecting your practice -- including references

By William Prescott, EMBA, JD

Before the economic downturn in late 2008, the Internal Revenue Service indicated that of the estimated $346 billion of tax gap, 75% was attributable to small business, which includes your practice. Tax gap is the estimated difference between the amount of taxes collected and what the IRS believes it is owed. The Small Business/Self-Employed Division of the IRS has reported that the tax gap is primarily comprised, in order of importance, of unreported income, S corporation distributions, and worker classification. With federal spending still continuing to increase in 2011, it should be no surprise that four developing issues are imminent: Forms 1099, worker classification, S corporation distributions, and employment audits under the previously reported National Research Project (NRP).

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