Tax Complexity and the IRS
∑ Eighty-four percent of small employers used a tax preparer for their most recent return, generally unchanged from 2006 (Q#1).
∑ The fear of non-compliance (and the associated fines, costs and time involved) in filing their taxes is the main reason small employers hire a tax preparer or accountant (Q#2).
∑ Of those small employers who did not use a tax preparer for their most recent tax filing, 78 percent said they did not use one because their return was simple enough to do themselves (Q#4).
∑ Currently, 64 percent of small employers use an electronic bookkeeping program for business purposes (Q#6).
∑ About half of small employers process their payroll in-house, 19 percent use an outside accountant or bookkeeper and 18 percent use a payroll service company (Q#28).
∑ Just over half of small employers personally handle the businessís financial paperwork and record-keeping, and 15 percent of owners delegate those responsibilities to an employee (Q#29).
∑ About 42 percent of small employers spend four hours or more a month on tax compliance activities, with 12 percent spending over 10 hours or more a month (Q#8).
∑ The main tax compliance activity for half of small employers is paperwork preparation (Q#9).
∑ About one-third of small employers have sought information from the IRS website over the last three years (Q#11). About one-quarter of them found the website very useful in accessing the information of interest (Q#12).