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Small business groups pushing back over IRS data requests

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The Internal Revenue Service (IRS), moving aggressively to collect more taxes from small businesses, is telling companies being audited to turn over exact copies of the electronic records kept in their business software programs, The Wall Street Journal reported.

The information comes out of a letter from an agency official to the American Institute of CPAs. The accounting group fears this will force small businesses to turn over customer lists, personnel data, confidential client information and other unrelated information often contained in the off-the-shelf software programs many businesses use to manage their finances.

Small business groups are beginning to push back, saying the agency shouldn’t treat small firms like bigger businesses, which usually have more elaborate accounting systems. Small businesses, often defined by the IRS as those with assets of less than $10 million, often use an off-the-shelf software program such as Intuit Inc.’s QuickBooks or Sage Group’s Peachtree.

“Many accountants are worried this could lead to fishing expeditions” to find problems beyond the scope of the requested information, said Danny Snow, a certified public accountant in Memphis who is active in the American Institute of CPAs. “It’s not like what the IRS asks of large companies.”

The IRS has been ramping up its tax-collection efforts in recent years, increasing the number of audits on companies and individuals and clamping down on overseas tax evasion, agency data show.

To read the full article in The Wall Street Journal, click here.