It has been said that “People who complain about taxes can be divided into two classes: men and women” (IRS). The majority of these complaints stem from misunderstanding taxes. Today, businesses have seen an increase in tax notices due to incorrect data reports and tax agency staff changes.
It is vital to have the appropriate tax information when paying and reporting taxes. Without the correct tax information, notices will be generated by the tax agency. These tax notices can be costly and time consuming to your organization. To help prevent tax notices, see the tips and best practices listed below:
Tax information that can generate a tax notice includes:
- Paying or filing taxes with an applied for status.
- Having a tax identification number that is incorrect or with the incorrect format.
- Paying taxes with the incorrect deposit frequency.
- Having the incorrect tax rate being remitted and/or reported.
Best practices to help prevent tax notices:
- Always make sure your organization has registered appropriately and timely with any new tax jurisdiction. This will help ensure you receive the tax information as quickly as possible.
- Verify tax identification numbers and tax rates each quarter.
- If your organization uses a third-party to administer your taxes, remember to notify them of any tax changes especially deposit frequency, identification numbers, and rates.
For more information on taxes and penalties of which your company should be aware,check out our recent blog, “Beware: Tax Penalties & Fees“. If you would like more information on how your company can avoid costly fees and penalties in regards to tax payments, feel free to contact us at sales@mpay.com.
Photo Credit: Jason Dirks