Small businesses--a category that includes farmers and sole proprietorships and partnerships, S corporations, and corporations with assets of less than $5 million--are an important segment of taxpayers that are subjective to substantial federal tax requirements. Not only do they account for nearly half of all taxes that the Internal Revenue Service (IRS) collects each year, but they also have extensive interactions with the agency as they try to meet their tax obligations. In response to congressional interest in alleviating the burden that the federal tax system places on small businesses, GAO is issuing a series of reports on the magnitude of the burden that complying with tax obligations imposes on these business. This report determines (1) the federal filing, reporting, and deposit requirements that apply to small businesses and (2) the actual experience of small businesses in meeting these requirements, including their involvement in IRS' enforcement processes.

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