IRS Statistics [Excel file] show that you are 10 times as likely to be audited as a Schedule C filer than if you incorporate your business and elect S corporation status. While it costs a bit of money to incorporate, the move affords you greater personal liability protection and reduces your chances of being audited. In deciding whether to change your business status, include both tax and non-tax factors."10 Ways To Avoid A Tax Audit," by Barbara Weltman, April 15, 2011
Note: Forming a limited liability company for one owner will not give you any audit protection, because the owner still files a Schedule C.
Sunday, April 17, 2011
According to this Wall Street Journal article, sole proprietors filing Schedule C with their personal (1040) tax return to report business income are 10 times more likely to end up involved in the stress, annoyance, and time consumed with an IRS tax audit:
Tuesday, April 5, 2011
California's Secretary of State has issued an alert regarding online notary services, purporting to provide notarization for California residents over the Internet using a webcam. A webcam is not a permissible substitute for appearing before a notary in person (or having the notary travel to you, if you are not mobile). Notary license may be checked online here. The full text of the alert follows:
Online webcam notarization is invalid and illegal in the State of California.
A private company claims to have the first online notarization website and has sent misleading information and made false claims to California notaries public concerning a new online notarization service. The web-based platform purports to allow a person to submit copies of identification over the Internet and to use a webcam in lieu of a personal appearance in front of a notary public. Appearance via webcam does not meet the requirements for notarization in California.
California notaries public are authorized under current law to perform electronic notarizations as long as all the requirements for a traditional paper-based notarial act are met, including the use of a seal for all but two specific documents used in real estate transactions. California law requires a person to appear personally before a notary public to obtain notarial acts like acknowledgments or jurats. This means the party must be physically present before the notary public. A video image or other form of non-physical representation is not a personal appearance in front of a notary public under current state or federal laws. The technology solution offered by this private company does not comply with California law.