EEW Rule #3
You won’t hear this from any other accountant
Everything Every Week Rule #3:
Don’t lie to these 3, ever:
Yourself
Your Accountant/Bookkeeper
The IRS
I’ll save the details of why you shouldn’t lie to Yourself or your Bookkeeper for a later post.
Here, I am going to explain why you must never lie to the IRS if you want your business to succeed.
And it is not what you’re thinking…
The reason isn’t well understood by most accountants.
Most accountants will say that you shouldn’t lie to the IRS. But if you listen carefully, most accountants are actually saying: “Don’t get caught lying to the IRS.”
This is because most accountants are thinking of the risk of IRS-imposed penalties for tax fraud.
Do IRS penalties matter? Sure. But that’s the same type of advice as “Don’t break the speed limit because there are laws against it, which results in fines and criminal penalties.”
But the far more important reason you shouldn’t speed is that it is unsafe to do so.
So what’s the real reason you shouldn’t lie to the IRS?
Lying to the IRS enables you to make bad business decisions without seeing the consequences in the short term, thus dooming your business in the long term.
Remember—the IRS taxes things that are GOOD for your business. So accruing taxes means you are doing the things successful businesses do.
All successful small businesses have a tax problem.
Rule #3 asks you to commit to being honest with the IRS because it’s bad for your business to do the types of things that make you want to lie to the IRS.
Honesty will improve your business behavior. It will clarify the true weaknesses in your business. And you won’t be tempted to blame the government for what are actually gaps in your business strategy or execution.
Commit not to lie to the IRS and you’ll end up with more money from your business.
That’s what Rule #3 is about.
Many of you reading won’t take this rule as seriously as I believe you should.
But very successful small businesses never break Rule #3.
