GYST Audit Update - 7-23-2014

An update to the ongoing saga of an IRS audit.

We last left you with the report on all the questions we needed to answer and report to the IRS.

We got a response that we had to prove that we took out a loan, and provide documentation. In other words, they didn't believe us. So another hour of work to get the "correct" proof for the IRS.

To add insult to injury, the City of Los Angeles sent GYST a form with estimated business taxes for 2013. They estimated that GYST made almost 2,000,000 (yes, count those zeros) in 2013. Which left the estimated tax at almost 3,500.00. I almost had a heart attach until I noticed that it was an estimate, and that the estimate was so blown out of proportion it would have been laughable, had it not been me.

This required that I go down to the City of Los Angeles Office of Finance. So, an extra three hours and found a parking structure that only charged $8 instead of the $27.00 and something max for the official city parking lot.

I was lucky to get a government worker who was really great. He explained some things I thought I would share with you.

First, even though I had sent in the form with the amount we owed in taxes, it was not recorded in the master city database, and it has been months. Hence the estimated form. We were supposed to get a card in the mail, but we never received it.

He also said that if you pay your business taxes online, they don't tell you this, but you will never get a snail mail notice in the mail again. Which was an issue for us. We attempted to login to the city to renew the license as well as fill out the tax forms but none of the passwords or logins that we were given when we initially signed up were working. Contacting them was even worse. No phone number with a person, and no email. So by the time we got the correct info the payment date was past.

For you creatives in Los Angeles who take the creative business exemption, if you send in your taxes even a day late, YOU ARE NOT ELIGIBLE any longer to claim this exemption. Something no one tells you.

So always mark the due dates for things on your calendar, and never wait until that date in case your login and/or password does not work.

The same thing goes for the State Board of Equalization, the office you send your sales taxes to. As of now, when you collect sales tax, you are no longer allowed to send in pre-payments unless you make over $100,000 a year. So you need to keep track of all your sales taxes and NOT spend it, so you have the money at the end of the year. Sometimes a hard thing to do if you need the cash. Just don't spend it.....

The IRS agent was supposed to meet with out accountant last Thursday, but she called and cancelled. She said she thinks she has everything she needs. No other additional information about when she would get back to us, so we are "cooling our jets" until we know the next move.

Feel free to ask any questions.

Written by Karen Atkinson, GYST Founder