An Acceptance Agent is a person, business, or organization authorized by the IRS to assist individuals not qualifying for a Social Security Number but needing an Individual Taxpayer Identification Number (ITIN) for tax purposes.

These individuals would usually require a ITIN to process tax schedules such as Form 1040. The role of the Acceptance Agent in this case is to help the individual through the application process by reviewing the required documentation. They will also forward completed forms W-7 to the IRS.

You can avoid tax issues in your business through one of the following ways:

  • Using a good record-keeping system. Research what kind of documentation you need to gather and maintain for your tax needs. Ensure that you have processes in place to keep all the support you’ll need at tax time.
  • Decide on the best accounting method for your business. Businesses use one of two tax accounting methods: cash and accrual. Depending on the nature of your small business, its legal structure, and its credit situation, you may consider using one of these methods.
  • Stay current on your taxes and file any past due returns. If you happen to have any past due tax returns related to your business, make sure to file them as soon as possible. This will help you avoid any penalties and interest and get on the right track for your taxes. Again, if you’re current, your tax professional has more options for helping you than if you’re late.
  • Clarify any unusual circumstances. Make sure that you explain unique circumstances you or your business experienced during the year with your tax professional. They will know how to treat it, and whether to report it or not.
  • Report all your business income. Make sure to obtain and maintain records of all your business income. Ensure that you have matched all your records and reported the right amount.
  • Review your tax return. Make sure to carefully review your tax return before submitting it. Even if you’re using a tax professional to help you file your return, ensure that you also review and understand your return before final submission.
  • Seek professional advice. If you have doubts as to how to undertake this process, consider consulting with a tax professional. They can help you better navigate the filing process and submit a more accurate return.

For most cases, employing the assistance of an Enrolled Agent will help you resolve your tax related issues. Make sure you meet with your EA and disclose everything so that they can choose the right method of resolution.

However, if an acceptable resolution cannot be found, you may contact the Taxpayer Advocate Service (TAS). Be aware that your EA can reach out to this agency on your behalf, if needed. This service allows you to speak with an advocate to assist you with the tax issue you may be having. Please note that every state has a local TAS office. There’s also a TAS office in Washington, D.C. and Puerto Rico.

To address any tax dispute with a Taxpayer Advocate, it must fall into one of the following categories:

1) You must have already tried repeatedly to contact the IRS to resolve the problem.

2) The agency did not get back to you as promised.

3) The regular IRS channels of communication did not work.

4) You are experiencing substantial tax-related hardship and financial problems.

If your business is a sole proprietorship or an unincorporated single-member LLC with you as the sole owner, the income is considered yours and taxed as such. Which means that the business portion is recorded on your personal tax return.

FREE TIP: Once your estimated taxes reach $1,000 or more, you need to start paying estimated taxes.

If your business is a partnership, an unincorporated multi-member LLC, or an S corporation, the ordinary business income passes through to members and is reflected on their personal returns. Hence, that free tip above also applies here.

In case you may owe more than the allowable amount at the end of the year after any withholding and refundable credits, you should make quarterly estimated tax payments. The alternative is to increase the withholding on any other income that is subject to withholding. You can use Form 1040-ES, Estimated Tax for Individuals, to determine if you need to make estimated tax payments.

When you file your income tax return at the end of the year, you should include income from your business on the following forms:

Don’t forget to claim any estimated tax payments you may have made during the year on your individual income tax return.

Generally, all corporations must make installment payments if they expect their estimated tax for the year to be $500 or more.

If you hired foreign employees or workers, you may need the assistance of a Certified Acceptance Agent. This agent is authorized by the IRS to assist individuals without a Social Security Number file a Taxpayer Identification Number (TIN). They can provide their expertise to guide the foreign employee or worker through the TIN application process, review the necessary documentation, and forward it all to the IRS.

Your business can face multiple tax issues if it fails to comply with the tax rules mandated by the IRS. From failing to file your tax returns on time to not reporting your income accurately, there are many reasons why your business may be in trouble with the IRS.

Here’s a list of the most common tax issues your business may face:

  • Not knowing all the different taxes your business may have. There are so many different tax requirements for the different types of businesses.
  • Failure to pay taxes.
  • Late filing of taxes.
  • Erroneous reporting of income and taxes.
  • Fraudulent tax reporting.

Some business entities’ income tax returns have due dates other than April 15. The instructions for each type of form used will note the appropriate due date(s), so refer to them as needed. Here are a few things you should know:

  • A sole proprietor’s Schedule C (Form 1040), Profit or Loss From Business, and an individual farmer’s Schedule F (Form 1040), Profit or Loss From Farming, for income and expenses are attached to the Form 1040, S. Individual Income Tax Return. This means that the due date is the 15th day of the fourth month following the end of the tax year. This is April 15 for calendar year taxpayers.
  • Most partnerships use the calendar year. The partnership tax return is generally due by the 15th day of the third month following the end of the tax year.
  • An S corporation generally must use the calendar year. It may use a different tax year if it can establish a business purpose for it. The due date is the 15th day of the third month following the end of the tax year.
  • A corporation that’s not an S corporation may use either the calendar year or a fiscal tax year. The corporate tax return is due by the 15th day of the fourth month following the end of the tax year.

Do you have any additional IRS-related questions?

Contact us for a free consultation at (561) 501-3080.