According to an article in the Dallas Morning News, the IRS will temporarily stop collecting penalties from some small businesses that have been hit with big fines for not disclosing the use of questionable tax shelters. This is a huge benefit for small businesses. I don’t know if readers remember, but in 2004 a law was created to punish big corporations that use tax shelters to avoid paying taxes. As you can imagine, it was the little guys who got the brunt of the punishment. Often small businesses are given bad advice about tax shelters that can land them in big trouble with the IRS. Many small businesses are facing fines of up to $300K because of this 2004 tax law.
Remember, don’t ever engage in tax “reduction” plans without consulting with an attorney. If you’re found guilty of tax evasion you could face hefty fines at least or in the worse case scenario end up in jail. For those business owners and individuals who are unable to repay their taxes due to financial reasons, bankruptcy may help. Taxes can often be discharged in bankruptcy under certain circumstances or they can be repaid under a reasonable repayment plan.