A letter went out this week from the IRS to around 20,000 employers with a title of “Notification of Possible Income Underreporting.” That’s enough to make anyone shift uncomfortably in their seat. The letter targeted those who, the IRS feels, reported an usually low amount of cash going through their business (versus debit and credit card transactions). Recipients are required to respond with an explanation of why their cash flow was so low.
The best thing you can do for yourself is to keep clear and accurate records for your business. Sorry, but it’s unlikely that really elaborate excel spreadsheet is going to do the trick. CheckMark offers professional level accounting software to reduce that headache and if you were to get a letter like that in the future, you’d have those solid records ready to go. Learn more about MultiLedger or check out the free demo available online.