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Small Businesses Fail to Report Exact Number of Sales

The Internal Revenue Service is likely to be giving out notices to many small businesses.

According to several media reports, the IRS has already sent 20,000 1099-K notices starting from last year’s fall season. The said form is for small businesses to return and fill up statements of their payment card and third party transactions including credit card payments.

IRS will be targeting small businesses whose credit card to cash ratio is seemingly unnatural for their current status in the industry. This happened because the agency believes that the above average reports from credit card statements only mean that small businesses are not disclosing the exact amount of their cash receipt transactions.

The agency emphasized the need for small companies to accurately disclose their earnings to pay their fair share of tax. While this seems to be the belief of the agency, they’re still open to listen to explanations that exist for high credit card statements. This resolution from the IRS is most likely because of trends reporting 68% of consumers choosing companies that accept credit card payments more than others.

More on this interesting news story can be found on this site.

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