The IRS attributes approximately $80 billion in unpaid taxes to sole proprietors underreporting their incomes each year. That’s according to a recent Government Accountability Office (GAO) report. The $80 billion comprises 16% of the estimated annual $496 billion “tax gap.” It is generally defined as the difference between federal income tax owed and the amount paid. The GAO defines sole proprietors as “individuals who own an unincorporated business by themselves.” The report identifies 17 options to improve sole proprietor tax compliance. For example, one option is to require sole proprietors to use a business account for all business transactions. To read the report: https://bit.ly/3NFGVC4. Contact us with questions © 2024