December 8, 2017

Business Tax Returns: More Hoops to Jump Through in 2018

Business Tax Returns ... Prepare for increased tax preparation time in 2018.  And get ready to fork over more personal and business-related information to the IRS.

Yes, the IRS thinks it does not posses enough of your personal and business information for tax purposes.  So, beginning in 2018, the IRS will require yet more information about businesses and business owners, including drivers licenses numbers from business owners with sole proprietor and partnership structure businesses.

Why?  Ostensibly to help prevent identify theft, and to help identify a "suspicious" business tax return.  However, as an Enrolled Agent licensed by the United States Department of the Treasury, I have not a clue as to what the IRS is targeting as "suspicious", because the IRS fails to disclose what would trigger a business tax return to be deemed "suspicious".

Doesn't the IRS already have enough information about tax payers without needing yet more?  One would think so.

According to the recent IRS News Bulletin IR-207-198 (read the entire bulletin here),  here's what tax professionals and their business tax clients are in for in 2018:
"For 2018, these “know your customer” procedures are being put in place that include the following questions:
  • The name and SSN of the company executive authorized to sign the corporate tax return. Is this person authorized to sign the return?
  • Payment history – Were estimated tax payments made? If yes, when were they made, how were they made, and how much was paid?
  • Parent company information – Is there a parent company? If yes, who?
  • Additional information based on deductions claimed
  • Filing history – Has the business filed Form(s) 940, 941 or other business-related tax forms?
Sole proprietorships that file Schedule C and partnerships filing Schedule K-1 with Form 1040 also will be asked to provide additional information items, such as a driver’s license number. Providing this information will help the IRS and states identify suspicious business-related returns."
One thing's for certain:  There is never a dull moment in tax land!

Tax Concerns?  

As a federally licensed Enrolled Agent, I provide tax preparation, tax planning, and taxpayer representation services to clients with technical or complex tax concerns.  For more information visit FoutsFinancialGroup.com.

Mary Rae Fouts

2 comments:

  1. what if you dont have a drivers license?

    ReplyDelete
  2. Good question. If no drivers license, an alternate form of identification - such as a passport number of state-issued ID card number - will likely be required.

    ReplyDelete

Thanks for sharing your comments here! Mary Rae Fouts