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Small Business Owners Beware Of Claiming Personal Expenses

Small Business Owners Beware Of Claiming Personal Expenses

Small business owners are often considered the lifeblood of the United States economy, with many of them working incredibly hard to ensure that their business is running at a profitable and successful level. Unfortunately, a lot of small businesses do not have the time or money to ensure that they are fully compliant with the various tax regulations created by the IRS. This is something that the government knows about, which is why they are getting more serious about prosecuting such businesses and their owners.

Owners are encouraged to file their taxes in a meticulous and honest manner. Hiring an accountant is the most sensible option, but it is possible to get the job done without any professional help. Disclosing any foreign accounts is particularly important, given the increased statute of limitations on such cases from the IRS.

There are many examples of small business owners who can lose their livelihood and reputation after an IRS fraud case. One such example is Albert Hee, who was the CEO of the Waimana Enterprises. His company was responsible for creating conditions that provided rural residents with high speed internet access in various parts of Hawaii.

Unfortunately, Mr. Hee became rather liberal with using company funds for personal reasons. It is stated that Mr. Hee began to pay his wife and kids a substantial salary through company funds, despite the fact that they did nothing for his company. He is said to have paid them almost $2 million over the years.

In addition, he spent almost $1.5 million on a brand new home near a prestigious college. While there is nothing wrong with buying a new home, Mr. Hee did so by using company money. He even let his children use the home for rental purposes, despite the fact that he stated the home was only purchased for business reasons.

Mr. Hee even used his company’s money to pay for his kids’ college tuition and expenses. He also paid off some of his credit card bills with company money, despite the fact that those credit cards were used for personal expenditures. Some of his family trips were also taken on the company’s dime.

Unfortuantely, this type of financial fraud is very common among small and medium-sized business owners. The reason Mr. Hee would liberally use company money was to save on his tax bill. By directly using company money for personal spending, he could under report his company’s earnings and save a lot of money.