The Internal Revenue Service is sending letters to small business owners suggesting that they may be under-reporting their income.
At first glance, this action from the IRS looks like it might be return fire from an entity and an administration that is under attack. This is after-all the Obama way. Never admit culpability. Shoot the enemy until there is no resistance. In this case, the enemy of this administration are the taxpayers in the U.S. small business community that see the federal government as out of control. Obama wants their cash to fund Obamacare and all of the other cash transfer activities of the state. Small business people are tired of involuntarily giving their hard-earned cash to him to fund things they do not support. Many people believe the state and the benefactors of state power are lining up against the citizens that fund the government beast.
Corporations shelter income in all sorts of legal ways that many small business people believe give the big businesses an unfair advantage. Many people believe rightly or wrongly that income under-reporting by small businesses is one way that the little guys can compete with the big guys.
Will this action by the IRS cause many small businesses to go out of business? Could this shot by the IRS further stimulate the black market economy? Will it be the beginning of a nationwide tax revolt? Will small businesspeople return fire?
It will be interesting to see how this plays out over the next several weeks.