If it doesn’t automatically qualify as a Minnesota business owner’s worst nightmare, it’s got to be a ranking contender.
“It” is an official notice from the Internal Revenue Service or the Minnesota Department of Revenue — or, in a worst-case scenario, both — stating that a business will be examined for tax-related issues.
Many business owners find such a notification ominous, and rightly so. An audit from federal or state tax examiners can cover a lot of ground. Although in some instances a probe might be somewhat narrowly focused on an alleged failure to pay sales tax or some other relatively confined and discrete issue, a targeted investigation in other cases might seek to examine virtually every aspect of a business.
That can especially be the case for a business that handles a lot of cash, such as a restaurant or bar. As we note on our website page discussing liability for uncollected taxes, “it is not unusual” for owners of such operations to receive audits questioning unreported income, underpayment of business taxes, outright tax evasion and other extremely serious matters.
What often surprises business owners is the liability that can potentially attach to them personally in such matters in the absence of explicit protections based on a carefully established tax structure that shields them from legal culpability.
In other words: In some instances, federal and state tax authorities can hold both a business enterprise and its owner severally liable for tax-related infractions.
Our law firm focuses on fully protecting the legal rights of business entities and their owners in tax disputes. Our principal attorney brings decades of relevant experience to that task, commanding an integrated background as both a tax attorney and certified professional accountant.
If you have questions or concerns regarding a business audit, our law firm stands ready to answer them and provide strong and focused legal representation that fully promotes your rights and interests.