Estate Tax Audits by the IRS

Income Tax Audits and Estate Taxes

There is something special about an income tax audit by the IRS (Internal Revenue Service) that causes more stress and anxiety than many other financial events. The possibility of tax returns being audited is actually quite rare so in most cases the stress levels are relatively unwarranted. 

The one tax return area that seems fully-deserving of a taxing level of anxiety is estate taxes. I could not help but sit up and take notice when I saw the most recent tax return examination data reported by the IRS. Just keep these two numbers in mind: 30% and over 100%. (How can you have over 100%, you might ask?)

It is normal for tax return audits to be based on a small representative sampling of all available returns. For higher incomes, this is usually between 2% and 3%. However, for estate tax returns this number becomes 30%. As representative samples go, this is a very big number. But because audits of estate taxes also frequently result in reviewing tax returns for previous years as well, the total audit percentage for larger estates (over $10 million) is closer to 110%.

Perhaps that IRS tax audit anxiety is closer to fact than fiction after all is said and done.

Small Businesses Negotiating With Banks

Business Negotiating With Banks

The process of negotiating with banks is often avoided by small business owners. The failure to implement effective business negotiations with bankers can lead to a variety of problems. By developing business skills in this critical area, several other financial benefits are likely to be realized. The importance of learning how to negotiate more effectively with banking institutions has increased due to the recent bank crisis which has severely impacted the ability of small business owners to obtain commercial financing.

Improving Working Capital Management

Working Capital Management Help

With most banks eliminating working capital loans to small businesses, it is only prudent that small business owners explore practical strategies for improving working capital management. This can start with a candid series of questions such as the following:

• Can I reduce business debt?
• Should I fire my bank?
• Can I reduce operating expenses?
• How can I improve business communication and negotiation with banks and suppliers?