Avoid Being Duped! Start with this 1 Simple, Free Step
By Diana L. Miles, ABI
Did you know you can order an IRS Transcript of the business Tax Return without any cost? This transcript details most of the line items of the recent tax returns that were filed with the IRS. Believe it or not, this IRS 4506T form available on the IRS website is surprisingly very easy to complete!
Why is this Important?
In most cases, the purchase price of the business being acquired is based on cash flows. Cash flows were derived from the business tax returns that the seller submitted to the business broker. It is possible, and I have heard of such examples, that the tax return provided to the business broker was not actually the same tax return filed with the IRS. Imagine how a fake tax return could affect value of the business and cause a buyer to overpay for it.
The Seller
You want your buyer to have that assurance that the tax returns you’ve presented are true. The 4506T validates your claim and helps build trust from your buyer.
The Buyer
Making the investment in a business is a huge step and is reasonably surrounded with many unknowns. However, this fairly effortless, precautionary step helps you gain confidence in the seller’s books and records.
Rest assured that each business sale/purchase facilitated by Bridge Mergers and Acquisitions includes this step. To contact Diana for further information, email Miles@BridgeMergers.com.