In last week’s post, we talked about new tax rules that may increase the risk of audits to general partnerships. Yet the tax obligations of LLC members may also be confusing.
A recent article makes a dire prediction: the risk of partnership audits may increase due to new tax rules.
A business must keep good records for practical reasons like tracking inventory and revenues, and simply to know whether its operations are “in the black.” However, the advice of an IRS publication is equally wise: Good business records may even stave off a tax audit.
One of the advantages of consulting with an attorney regarding an IRS tax controversy or dispute is the settlement angle. An attorney’s training in negotiating may prove useful in estimating the litigation hazards and providing a ballpark settlement figure that would be reasonable under the specific fact pattern.
Our tax law firm understands the importance of keeping accounting and legal advice separate. Commingling these two areas might lead to trouble.