The IRS as Your New Shareholder
Open disclosure is expected when dealing with our inner circle, business partners and investors. You go into detail, provide thorough explanation and compare the pros and cons of every decision so that all possible options and outcomes are before you. So why does the IRS now feel that they are worthy of the same guidance and information into the financial affairs, tax planning and preparation of corporate America?
You may be sitting back and thinking this doesn’t apply to you because you are not part of corporate America, but merely a homemaker, employee, intern or small business owner. Well let me assure you that if the IRS is permitted to require full disclosure from large corporations with more than 10M in assets to provide step by step analysis on every tax saving deduction and if challenged, what the rationale would be and how much they would owe if the deduction is denied. It is not so far off to think the same can happen to you. If you are feeling stripped and naked by this possible requirement to divulge every strategic method used in your advanced tax plan to save your company money and increase revenues, you should be. If this bill is passed, prepare to welcome the IRS as your newest shareholder: the uninvited one sitting at the end of the table with that smug grin that says, “Gotcha!”
What will this do to the number of audited tax returns? It is quite likely that the IRS will be in a better position to audit and challenge tax deductions and credits. Since all of the leg work will have already been done for them, the cost to pursue corporations will be minimal and the taxpayer is left in a precarious and exposed position. Given the large increase in auditors recently hired by the IRS, it is not surprising that they are looking for ways to put them to work more efficiently. The thought of having the IRS on the board of our companies, divesting us of privacy and the ability to tactically maneuver through the barrage of constantly changing tax codes is more than disheartening. It is frightening to lose the freedom for which so many have lost their lives. This country once went to war to uphold “no taxation without representation,” only to be defeated by the most undesirable representative. The IRS is one shareholder that is not welcome on the board.
The Center for Wealth & Legacy™ provides a wealth of knowledge with many specialists available offering your family and business assistance in areas of taxation. Desiree M. Wilson, MBA EA CEP, is a member of the Advisory Team for The Center for Wealth & Legacy™.
Wednesday, June 9, 2010 at 05:35PM 
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