Sam Brotman, JD, LLM, MBA November 6, 2013 5 min read

The IRS Small Business Self-Employed Division

Introduction to The IRS Small Business Self-Employed Division

The IRS Small Business Self-Employed Division oversees taxpayers and their issues that fall under one or both of these categories. The IRS Small Business Self Employed Division helps taxpayers meet their tax obligations by administering the Internal Revenue Code and applying tax law with “fairness and integrity,” according to the IRS mission statements. According to the IRS, the taxpayer profiles that fall under the IRS Small Business Self Employed Division include fifty-seven million taxpayers, forty-one million self-employed persons; and “[nine] million small businesses with assets of less than $10 million.” [1] An additional profile includes seven million filers of “employment, excise, and estate and gift returns.” [2] According to the IRS, the strategic priorities of the IRS Small Business/Self-Employed division address three types of tax gaps:

  • Underreporting Tax Gap: Taxes not collected due to taxpayer underreporting of their actual tax obligations
  • Underpayment Tax Gap: Taxes not collected due to taxpayer underpayment of their actual tax obligations
  • Non-filing Tax Gap: Taxes not collected due to taxpayer non-filing or otherwise not meeting their filing obligations.

The IRS Small Business Self-Employed Division’s purpose is also to improve service and business processes, reduce burden, develop human capital, and address strategies that help to promote productivity and improve employee engagement.

The IRS Small Business Self-Employed Division serves this taxpayer profile[3] through the following five organizations:

  • Collection: This organization collects delinquent taxes and secures delinquent tax returns.
  • Compliance Services Campus Operations: The division oversees the tax compliance activities of the following campuses: Brookhaven, Philadelphia, Cincinnati, Memphis, and Ogden.
  • Examination: The purpose of the Examination Division is to help the taxpayer under this profile understand their tax responsibilities. The division applies tax law with integrity and fairness. The application of tax law is conducted through Field and Office Audit examinations.
  • Specialty Taxes: Under this division, there are four market segments the SB/SE division caters to:
  • Employment Tax
  • Excise Tax
  • Estate and Gift Tax
  • International Tax
  • Communications and Stakeholder Outreach (CSO): The mission of CSO is to “deliver integrated strategic communications and educational products to employees and taxpayers...” The CSO also coordinates tax administration activities between practitioners and industry groups.

These five organizations serve small businesses (start-up and part-time), small businesses with employees, small businesses without employees, taxpayers with rental properties, taxpayers with farming businesses, individuals investing in businesses, which may include both partnerships and S-Corps; corporations, S-Corporations, and partnerships with assets under $10 million, and fifty-five million other customers.

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[1] See: www.irs.gov, "The IRS Small Business Self-Employed Division At-a-Glance,” 4/21/2013

[3] The IRS Small Business/Self-Employed Division serves individuals filing Form 1040 (U.S. Individual Income Tax Return), Schedules C, E, F or Form 2106 (Employee Business Expenses).

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Sam Brotman, JD, LLM, MBA

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