Is the IRS Targeting Small Businesses? Yep, Says One Expert

According to Small Business Trends, the “random” audits of small businesses and their owners’ tax returns by the U.S. Internal Revenue Service (IRS) to find unreported income has left the small business taxpaying community feeling like they are being picked on and unduly forced to go “through the wringer.”

That is according to Donald T. Williamson, a professor of taxation at American University’s Kogod School of Business, Washington, D.C., who says the growing number of IRS audits seem to disproportionately target small business taxpayers.

“Most audits are not random, i.e. the IRS has a secret algorithm for determining how likely each taxpayer is to have unreported income,” wrote (PDF) Williamson in recent testimony submitted to the United States House of Representatives’ Committee on Small Business. The committee is investigating issues small businesses confront when they are audited by the IRS.

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Small Biz Trends- Is the IRS Targeting Small Businesses? Yep, Says One Expert