IRS Tan Tax Letter & Repeal Update

A couple weeks ago, I let you know the IRS mailed out letters to thousands of tanning salons suspected of being non-compliant in filing their 10 percent tan tax. The letters were not notifications of an audit (I’m told the IRS prefers the term “examination”), but reminders to salon owners to get their payments up to speed, as significant penalties and fines result from delinquent taxes. Of course, I’m guessing these salons are likely to face an examination at some point, but if they are compliant, there’s no reason for concern.

What is disconcerting, however, is the number of salon owners across the nation who received IRS letters – but found them riddled with errors. For instance, one salon owner received two letters – one for each of the salons that operated in the space before he purchased it.

Another salon owner received a letter that had the wrong business name, her corporation’s name in the address, the wrong address and the wrong federal ID number – it’s a wonder that one even reached her! For the record, she’s had her federal ID established (at the correct address) for nearly two decades. Upon calling to let them know of the errors, they requested that she write them a letter ... I’m sure I don’t need to remind you to keep copies of everything you send their way.

Another owner received two letters addressed to her corporation’s name; one with the name of her salon, another with a salon she’d never heard of – and both with Tax ID#s that didn’t belong to her. Several other business owners received letters at their salons with the wrong salon name – and no other salon ever occupied that space. And finally, to take the cake, one owner got a letter for a salon that closed last year – located half a mile down the street.

Not sure what kind of database debauchery you’ve got going on there, IRS, but have fun sorting that mess out.

Tan Tax Repeal

In the meantime, with the formal announcement of U.S. Rep. Michael Grimm’s tan tax repeal effort, H.R. 2092, the Indoor Tanning Association has set up a web page to help drum up legislative support. Simply click here, enter your ZIP code, and you’ll find the contact information for your elected officials, as well as an online form to assist you in sharing your message with them. The tool is appropriate for salon owners, employees, family, friends, customers and anyone else interested in seeing the 10 percent tan tax removed from President Obama’s healthcare reform law.