Across America, small businesses have been hit hard by coronavirus crackdowns that state and local governments have imposed over the last ten months. During much of this time many small businesses have been ordered completely shut or have been subjected to strict limitations on how they can conduct business. Such limitations include restaurants having reduced occupancy mandates for dine-in or being limited to providing take-out or delivery. Retail shops have been subjected to reduced occupancy mandates or been allowed only curbside pickup to sell products.
The government-imposed restrictions have killed off many small businesses. Many others are just managing to hang on, their owners hoping that over the horizon normal operation, and with it sufficient profits, will be allowed to resume.
Meanwhile, many large retail store chains — Costco, Target, and Walmart, for example — have stayed in business making money hand over fist. So also have internet-based sellers including the dominant Amazon reaped large profits as small business competitors have been pummeled by government mandates put in place in the name of countering coronavirus. Notably, national restaurant chains with their largely drive-through-focused business models long in place have had, during the coronavirus crackdowns, a leg up on many of their small business competitors that rely on dine-in customers.
Now comes along the United States government’s Internal Revenue Service (IRS) with its plan to increase audits of small businesses in 2021. Laura Davison reported at Bloomberg in November that the IRS plans to increase audits of small businesses in the coming year by around 50 percent. Some of those small businesses that owners have taken extraordinary actions to keep alive through 2020 in the face of coronavirus crackdowns can be expected to be killed off when IRS audits, and with them additional tax payments as well as legal and accounting fees, come in 2021.
The new year is arriving with coronavirus crackdowns set to continue in much of America and the IRS pursuing a big increase in its audits of small businesses. Heightened government actions killing small businesses is looking to be a theme of 2021 just as it was of 2020.
Reprinted with permission from the Ron Paul Institute for Peace and Prosperity.