Operating or owning a new business can come with a load of challenges. One of these challenges is having to fill a lot of paperwork. It can become a bit stressful while handling tax-related paperwork, and mistakes can occur regularly. As a business owner, you will have to apply for an Employer Identification Number (EIN) for which you will have to fill an SS-4 form. If you have no idea how to, use a service like https://www.federal-ein-application.com/irsein/irs-form-ss-4/.
One should be very careful when filling an SS-4 form. Filling a wrong form can have a number of issues mostly with the Internal Revenue Services (IRS).
One problem that will result from filling the wrong SS-4 form is that the IRS will expect tax returns for the wrong choice that you made. Filing an SS-4 form for a larger business than your own means that the IRS will expect you file more tax returns. The IRS will require a response once you fail to file the expected amount of returns.
Sometimes, a mistake can mean that some money is owed to you by the IRS. Unfortunately, sometimes filling the wrong SS-4 form can mean that you owe the IRS money for failing to file the expected tax returns. If you find this out it is easier to correct the information and make the payment you owe. If not, the charges continue to accumulate and you could later suffer financially by having to pay a very large amount.
If the mistake is not noticed early enough, the IRS imposes fines and penalties on people it deems ignorant. The IRS has various fines for people who fill the wrong taxpayer information on forms, have missing forms, have errors on forms or submit forms when it is late. Although penalties are not high for small business, sometimes the IRS can charge up to $500 and more depending on the issue. Filling a wrong SS-4 form can easily lead to a penalty with the amount to be paid depending on how big the business is or whether the mistake was intentional or not.
Exceptions to Penalties
If you have made a mistake, such as filling the wrong SS-4 form you do not have to worry. At times, one can be excused if there is a good reason for the mistake and it is corrected in time.
If you can show that the mistake was as a result of an understandable cause, penalties may not apply. The IRS must be able to see that the mistake occurred due to something that you could not control and you responsibly tried to handle the issue.
Proving that the mistake occurred due to an error by the IRS or their systems can also lead to an exception to a penalty. Additionally, in the case of an error or an omission, you can be excused since this does not stop the IRS from processing your returns.
Once you notice a mistake or issue with your tax returns, it is easier to help the IRS pinpoint the problem by sending them a letter. You can easily correct the mistake and avoid extreme consequences such as the closure of a business due to allegations of fraud.