Strategies Business Owners Use to Comply with Federal, State, and Local Taxes

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Section 1: Foundation of the Project

Complying with federal, state, and local taxes is vital in any business. Failure to

comply with tax law can result in heavy fines, legal proceedings, probability of being

audited, and damage to company reputations (Palupi & Putri, 2021; Tilahun, 2019).

Federal, state, and local governments rely heavily on taxes to carry out their duties

(Tilahun, 2019). While tax compliance is essential for businesses to operate legally

according to government guidelines, the process can be costly, and laws are difficult to

changes in tax laws and improve understanding of those laws. This qualitative pragmatic

inquiry involved investigating business owners’ strategies to comply with federal, state,

and local tax requirements.

Background of the Problem

Ensuring compliance with federal and state-local tax regulations is paramount in

the United States. The dynamic and intricate nature of tax legislation challenges

businesses to adhere with precision (Taing & Chang, 2020). Small business owners may

face considerable expenses in terms of meeting regulatory requirements, which can

compound difficulties involving ensuring adherence to tax laws. Moreover, the COVID19

pandemic compelled numerous enterprises to transition towards remote work, thereby

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leading to payroll tax challenges. Business proprietors must acquaint themselves with tax

Businesses can pay heavy fines, face legal proceedings, and damage company

reputations if they do not comply with federal, state, and local tax laws. The IRS (2022)

estimated the average gross tax gap for business and employment taxes for 2014 and

2016 was 119 billion dollars. The general business problem is that small business owners

lack strategies to comply with federal, state, and local tax requirements, resulting in

paying tax penalties and fines as well as risking business suspension. The specific

business problem is some small business owners need strategies to comply with federal,

state, and local tax requirements. Therefore, the purpose of this qualitative pragmatic

inquiry was to identify and explore practical strategies that small business owners use to

comply with federal, state, and local tax requirements.

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The three primary research methods are qualitative, quantitative, and mixed

business owners’ experiences using a semi-structured interview process. To address the

research question in this study, I used the qualitative method. This was appropriate for my

study because I explored a phenomenon from participants’ perspectives.

Qualitative research designs include phenomenology, ethnography, and pragmatic

inquiry. The phenomenological design is appropriate when researchers want to explore

participants’ experiences involving a specific phenomenon (Adams & van Manen, 2017).

Ethnographic researchers understand participant behaviors by addressing cultural and

social environments (Watson, 2018). The most appropriate research design for this study

was the pragmatic inquiry. House (2018) described pragmatic inquiry as an introspective

approach that involves eliciting data from semi-structured interviews. I used this research

design to interact directly with business owners, giving me a deeper understanding of the

The theory that grounded this study was the theory of planned behavior (TPB),

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exploring strategies small business owners use to comply with federal, state, and local tax

state, and tax requirements?

According to Kane (2020), assumptions are statements that researchers assume to

be true without concrete evidence to support and verify them. In this proposed study, I

assumed participants created successful strategies to comply with federal state, and local

taxes. I also assumed participants understood taxes they needed to comply with. Finally, I

assumed participants answered interview questions honestly.

Limitations

Limitations refer to challenges and effects outside the researcher’s control that

restrict study depth (Hughes et al., 2019). Limitations involved identifying successful

participants who successfully navigated federal, state, and local tax requirements

consistently for 5 years, limited time to conduct an extensive study, and unbiased

responses to interview questions.

Transition

Section 1 included the foundation, background of the problem, purpose statement,

research question, assumptions, limitations, and delimitations. Section 2 includes an

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indepth literature review on business and tax compliance. Section 2 also includes a

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The main objective of my study was to determine successful strategies adopted by

business proprietors to comply with federal, state, and local tax requirements. I aimed to

provide an organized summary of relevant literature. I reviewed professional and

academic sources regarding federal, state, and local tax compliance frameworks for small

taxes, compliance costs, sales tax, and excise taxes. I used the following databases:

Science Direct, ProQuest, SAGE Journals, Emerald Insight, EBSCOHost, Google

Scholar, and Walden Library.

Conceptual Framework

Ajzen’s TPB was the theoretical framework. According to the theory, intentions

shape human behavior (Ajzen, 1991). The theory of the planned behavior model has been

successfully used to address tax laws. This study involved examining variables that affect

small business tax compliance using the TPB behavior as the conceptual framework.

Theory of Planned Behavior

The TPB is used to predicts people’s intentions to engage in certain behaviors at

certain times, places, and circumstances. It is a psychological theoretical framework that

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presupposes intentions are critical for predicting human behaviors, and people have

& Špírková, 2021). Therefore, the essential pillar of the TPB is intention since

motivational factors determining a person’s behavior are difficult to establish without it.

The three components of the TPB are attitude toward the behavior, subjective norm, and

perceived behavioral control (Ajzen, 1991). The TPB can be used to justify intentions and

provide precise explanations concerning tax compliance behaviors among those who are

legally obliged to pay taxes, as demonstrated by their attitudes towards behaviors.

Attitude

Attitude plays a role in shaping human thoughts, emotions, and actions. Bellová

and Špírková (2021) articulated attitude is a function of salient behavioral beliefs that

lead to perceived likely outcomes of behaviors. Brownstein et al. (2020) argued attitude

can be measured explicitly or implicitly as well as directly or indirectly to predict

peoples’ behavior. Attitude shows the level to which people have a supportive or

unsupportive assessment of behaviors of interest. Ajzen (1991) stated attitude formation

involves cognitive or information processing and is anchored in people’s beliefs

linking them to specific attributes. Therefore, attitude towards behavior impacts tax

compliance. When taxpayers believe outcomes of paying taxes are favorable or

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unfavorable to their interests, they have positive or negative attitudes toward tax

with desirable outcomes and form negative attitudes toward behaviors they associate with

undesirable outcomes (Ajzen, 1991). Taxpayers must first understand paying taxes is a

behavior that will produce anticipated desirable outcomes. Taing and Chang (2020)

articulated in the context of tax compliance, people pay taxes when they have high tax

morale, which is intrinsic motivation to pay taxes in order to contribute to societal

development. Taxpayers voluntarily pay taxes even in environments with low tax

enforcement because of intrinsic motivation that paying taxes is an obligation (Taing &

Chang, 2020). Hence, tax morale positively impacts tax compliance behaviors. There is a

negative correlation between tax morale and tax compliance behavior because low tax

morale is an attitude that undermines tax compliance behavior.

Low tax morale is associated with noncompliance because taxpayers feel morally

in a tax environment where tax laws are misunderstood, taxpayers may believe there is no

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towards noncompliance result when taxpayers fail to file tax returns, underreport taxable

External pressures can influence business owners to exhibit tax compliance

behaviors. Subjective norms include perceived social pressures to engage or not engage

in given behaviors (Ajzen, 1991; Taing & Chang, 2020). People’s normative beliefs

impact subjective norms and motivations to comply with given behaviors. A subjective

norm in the context of tax compliance is level of fairness in terms of tax infrastructure, as

well as level of trust taxpayers have in governments (Taing & Chang, 2020). Al-Rashdan

and Al-Zaqeba (2020) stated perceptions of tax authority plays a fundamental role in

determining whether taxpayers should perform or not perform behaviors. Therefore, if

taxpayers perceive taxing bodies are accountable and transparent in terms of using tax

revenues, they will trust the system and be compliant (Taing & Chang, 2020).

Conversely, noncompliant attitudes and behaviors among taxpayers occur when there is a

Subjective Norms and Tax Compliance

Tax fairness involves functional beliefs that indicate whether taxpayers should or

(2023) suggested that if punishment is severe (length of imprisonment), specific

force taxpayers to comply with tax obligations. Given this, tax audits, knowledge of

taxation, complexities associated with taxation processes, and tax agents may be general

deterrence elements that can demotivate taxpayers from using the fraud triangle to

commit tax fraud.

Theory of Fraud Triangle

The concept of the fraud triangle was introduced in 1950 by Donald Cressey, a

criminologist who formulated this theory to comprehend the underlying motivations that

drive individuals to engage in fraudulent activities (Cressey, 1952). The Fraud Triangle

theory proposes a framework for understanding why individuals engage in fraud.

Sánchez-Aguayo et al. (2021) and Awang et al. (2021) explained that Donald R. Cressey,

an authority in the sociology of crime, proposed the Fraud Triangle Theory (FTT) in the

1950s to analyze why fraud convicts committed crimes. FTT has three elements:

participate in fraudulent activities; the perceived opportunity is the second component,

and make their illegal acts justified and acceptable (Awang et al., 2021; Sánchez-Aguayo

comply and ease the financial burden (Sánchez-Aguayo et al., 2021). Additionally,

a lack of deterrence (penalties) to pursue non-compliance with tax obligations. Finally,

taxpayers may use excuses, including lack of utility, tax complexities, and absence of tax

information, to rationalize non-compliance with tax obligations (Sánchez-Aguayo et al.,

2021). Wrong rationalization justifies illegal actions, and correct rationalization

condemns fraud (Awang et al., 2021). Therefore, FTT explicates how pressure, the

perceived opportunity to evade, and the capacity to rationalize the act sufficiently prove

or disprove taxpayers’ non-compliance behavior.

U.S. Tax Structure

tax laws have led to a comprehensive tax structure incorporating interesting elements of

of public revenues derived from multiple tax sources in a particular jurisdiction

source at the federal level, with higher-income earners facing more significant tax

deductions further contribute to government revenue, alongside value-added tax (VAT)

and excise tax, which impose levies on specific products and activities (Bastani et al.,

2019). Income taxes from gross salaries and consumption and excise taxes, particularly

burdensome for businesses, represent primary revenue sources with high compliance

costs (Vishnuhadevi, 2021). Additionally, the tax structure encompasses sales tax,

property levies, estate taxes, customs duties, corporate income tax, motor vehicle taxes,

and gift taxes (Vishnuhadevi, 2021). This intricate tax framework presents significant

challenges and implications for businesses and individuals.

Tax System

situations. Blank and Osofsky (2020) noted that this voluntary system lifts the

of such information. Under this tax system, the government’s primary responsibility is to

allows individuals and businesses to take the obligation of calculating tax owed and

making accurate and appropriate returns from the onset, as opposed to waiting for the

government to take the initiative when forced by circumstances like noncompliance.

Previous studies have examined how certain factors facilitate or limit the

effectiveness of voluntary tax systems while drawing upon empirical evidence from an

MSME perspective. One such study by Albab and Suwardi (2021) revealed that tax

knowledge can influence the level of trust taxpayers maintain in their governments,

which mediates behaviors like voluntary tax compliance. A separate study by Hoang et al.

(2021) investigated compliance behaviors in SMEs showed that a manager’s expertise

and understanding of tax laws can impact voluntary compliance positively or negatively.

Consequently, these factors can affect taxpayers’ propensity to cheat, evasion, and tax

motivations to engage in voluntary compliance.

Federal Taxes

Tax administration and public revenue generation in the United States occurs at

three jurisdictional levels, starting with those considered at the federal level. Federal taxes

contribute the largest share of the total revenue contributions by employed persons,

businesses, and institutions. Federal taxes include direct taxes derived from personal

income for individuals working in various organizations, social security tax, corporate

income tax, VAT, and excise taxes (Yanikkaya & Turan, 2020). The IRS represents the

central agency mandated with various roles, including providing federal tax

administration and enforcement. Part of its tax law enforcement focuses on ensuring

citizen’s welfare. Another source of federal revenue is the social insurance tax, computed

as a sub-component of the labor tax in the payroll (Yazbeck et al., 2020). These federal

taxes have offered an effective means to finance health insurance programs and support

health reforms, enabling the U.S. government to make positive strides toward universal

health coverage.

component in the fiscal structure cannot be overlooked. Ordinarily, the federal tax law

permits the national government to collect excise tax, which constitutes a special levy

collected at the POS for certain products. Based on the IRS interpretation of excise tax,

(Boesen, 2021). Predominantly, this included federal tax revenues resulting from specific

federal excise taxes charged on select goods, including alcoholic products, luxury

merchandise, petroleum goods, and tobacco, with an end goal of maximizing income and

promoting deterrence of potentially harmful behaviors and practices (Bankman et al.,

2023). The government recommends levying this tax at the starting point of the value

chain to reduce the compliance burden and enhance tax implementation by keeping the

number of taxpayers at a minimum.

State Taxes

The economic model maintained by the United States stresses jurisdictional fiscal

autonomy and economic decentralization, presenting opportunities for state governments

to establish and enforce tax policies independent from the existing federal tax system. In

other words, state governments exercise autonomy by introducing different taxes,

defining tax rates depending on macroeconomic circumstances and political forces,

abolishing certain taxes, issuing tax breaks when necessary, and establishing

the United States has led to a decentralized tax structure where each state can establish its

revenue bases, collect taxes, and decide on what rates to use independent of the federal

generate public revenue, from personal income taxes to sales levies and returns from

all U.S. states, public revenue accrued through income tax returns has become pivotal in

in resource allocation (Jensen, 2022). Other common state revenue bases include

corporate income levies, which target domestic firms engaged in profit-generating

business and sales taxes – broadly applied at the POS for various items traded or services

rendered. State governments in jurisdictions with functional sales tax systems and other

tax schemes assume important roles in collecting levies and providing necessary

assistance on tax-related matters to ensure compliance (Carrillo et al., 2021). Altogether,

state tax collections from individual and corporate income and other bases have proved

effective in accelerating development programs and reducing regional heterogeneity

Local Taxes

important source of public revenue and a key driver of economic growth. Local taxes

et al., 2020). In the United States, local tax bases include direct charges local

governments target individuals and small business owners who constitute the majority of

has eased the requirements for inventory accounting and reduced the compliance burden

by allowing local taxpayers to complete their payments through cash methods in place of

more restrictive tax accounting paradigms, which have previously contributed to

noncompliance behaviors.

Business Taxes

Businesses, from micro, small, and medium-sized enterprises (MSMEs) to large

corporations, remain the largest contributors of taxable income in the American economy

at the federal and other jurisdictional levels. The tax compliance behaviors demonstrated

trends in taxation strategies adopted by federal and regional governments to increase

place-based business policies to improve business access to tax credits. Furthermore,

a basis for validating information reports about taxable business incomes (Adhikari et al.,

2021). For practical reasons, current systems obtain business taxes to ensure that capital

gains from commercial activity undertaken by domestic enterprises contribute to the

economic development of the local economy.

Sales Taxes

Sales taxes refers to all levies charged by state and local governments on various

goods at the POS. Sales taxation also targets capital gains from different services

delivered to customers within a particular jurisdiction. In practice, a sales tax represents a

percentage measure of the price received on an item or a service by sellers rather than the

equilibrium price (Eisenhauer, 2022). As a corporate income tax component, a sales tax

focuses on all taxable sales a business makes within a definite period. However, it is

worth noting that sales tax rates enforced in different states or local contexts are more or

less similar to those adopted in other areas. In most cases, sales taxation is considered

non-salient, as the actual tax is not explicitly included as a component of the price

Essentially, sales taxes provide an avenue for states and local governments to generate

Use Taxes

purchase. For example, governments may subject this type of tax on retail goods

purchased by individuals from other states through e-commerce platforms or in person.

Kovacev (2020) postulates that the incidence of a “use tax” is clear-cut on who should

bear the compliance burden: an out-of-state retailer who sells specific goods or offers

certain services to consumers, whether online or through a physical shop. For instance,

Florida requires permanent and temporary residents in the state to complete Form

DR15MO every three months and remit a flat-rate 6% use tax on all items purchased

from other U.S. states if the total tax liability payable for such goods exceeds $1.00

(Jones, 2019). In this respect, some states define “use tax” as an alternative or

complementary compliance mechanism for sales tax liability, particularly when legal

avenues for sales taxation do not exist or are insufficient due to differences in state of

residence and geographical location where a purchase or consumption occurs (Jones,

2019). While use taxes are frequently debated in sales tax contexts, their design makes

them appreciably different from the latter, mainly by empowering state tax institutions

on items acquired, stored, or consumed outside states. In the existing business tax

scheme, a use tax is defined based on the geographic location where a customer

Compliance encompasses a critical component of the most successful tax systems.

constrain public resources and contribute to tax gaps, as aggregate revenues collected and

compliant (Adhikari et al., 2021). A different review by Maulidi (2020) has offered a

criminological perspective on tax compliance and provided critical insights into the legal

parameters and ramifications of non-compliance. Maulidi (2020) argues that involvement

in fraudulent behaviors, such as inaccurate tax reporting, presenting forged audit reports,

and general non-compliance, exposes individual offenders and other actors involved in

such schemes to significant legal liabilities, which may come at a considerable cost. The

research draws upon evidence from bureaucratic scandals that have prompted expensive

lawsuits and subjected elite executives from reputable organizations to hefty fines for

Transition

literature on business and tax compliance in depth and discussed the conceptual

also address data collection tools, techniques, organization, analysis, and reliability,

This section includes an examination of the project. I address my role as the

researcher, participants, sample populations, research methods, and the research design. I

address data collection tools, techniques, organization, analysis, and reliability and

effectiveness of data.

The role of the researcher in qualitative research involves collecting data,

2019 and work closely with some small business owners. I help business owners with

The Belmont Report guided my research. This foundational document establishes

ethical principles for researchers working with human subjects, emphasizing the

importance of beneficence and justice. Respecting individuals involves recognizing

participants as autonomous agents (U.S. Department of Health and Human Services,

Department of Health and Human Services, 1979). Justice refers to moral obligations

Pragmatic Inquiry Manual. My understanding of the manual enabled me to conduct

consent forms to ensure they had sufficient information to make independent and

informed decisions about participation. This promotes respect for individual autonomy

and protects rights and wellbeing of participants (Lindsay et al, 2019). Participation in the

study was voluntary, and participants could withdraw at any time without facing any

penalties. To ensure confidentiality, identities of all participants were masked with unique

identifiers. Per IRB procedures, I will securely retain all collected data for 5 years to

safeguard participant confidentiality.

Three primary research methods are qualitative, quantitative, and mixed methods

(Yin, 2018). Quantitative researchers focus on regulations and rules in certain

Qualitative methods are relevant when researchers explore phenomena from participants’

from participants’ perspectives. I examined small business owners’ strategies to comply

with federal, state, and local tax requirements.

inquiry (House, 2018; Yin, 2018). The phenomenological design is suitable when

researchers want to explore participants’ experiences regarding a particular phenomenon

(Adams & van Manen, 2017). Ethnographic researchers try to understand participants’

behaviors by inserting themselves into cultural and social environments (Watson,2018).

The most appropriate research design for this study was the pragmatic inquiry. House

(2018) described pragmatic inquiries as an introspective approach that involves eliciting

data from semi-structured interviews. I interacted directly with business owners, giving

me a deeper understanding of phenomenon. This enabled me to identify and holistically

five 5 of experience with federal, state, and local business tax compliance; five

defined purposeful sampling as deliberate selection of participants who are experts in

they could recommend any other qualified business owners they knew.

Furthermore, I selected participants who aligned with the project's overarching

participants who are most accessible to them and provide them with the necessary

information. To establish trust early in the research process, I initiated contact with the

selected participants, by phone call or email explaining the study's purpose and allowing

them to decide whether they wished to participate freely. Subsequently, I followed up

with an email containing additional information and a request for written consent. I

ensured that participants were treated with respect, dignity, and privacy throughout the

research process. Additionally, I continued to collect data until data saturation was

reached. As Saunders et al. (2018) described, an interviewer has reached data saturation

Data Collection Activities

I was the primary tool that collected and analyzed the data for this pragmatic

the most effective method for researchers to gather pertinent data on participants'

enhances the reliability and validity of the findings. The semi-structured interviews for

this study included predetermined open-ended questions that explored the strategies

business owners use to comply with Federal, state, and local taxes. I followed an

interview protocol (see Appendix A) by asking questions and ensuring the participants'

comfort. During the interview, I also observed the participant's body language and asked

probing questions based on my observation. Lastly, I utilized additional publicly available

data to provide comprehensive support for the interviews. By doing so, I was able to offer

a more detailed insight, verify facts, and provide a well-rounded perspective on the topics

discussed during the interviews.

Interview Questions

1. What strategies do you use to comply with federal, state, and local

5. How do you measure the effectiveness of the tax strategies

implemented

6. What alternative strategies have you considered or tried, and why

comply with

Federal, state, and local tax compliance?

Data Organization and Analysis Techniques

The organization data allows the researcher to reference and review easily.

Goldsmith (2021) emphasized that researchers should organize data meticulously to

uphold research quality and generate coherent, meaningful information while adhering to

ethical guidelines. According to Goldsmith (2021), the objective of data organization is to

establish a clear connection between the data and the summary findings. I used an Otter

process, I examined relevant documents, including interview notes, transcripts, and

Data analysis requires coding the collected data into meaningful units (Goldsmith,

conceptual framework of the theory of planned behavior framed my data analysis. It

local tax compliance strategies.

Reliability

Reliability is a cornerstone of qualitative research studies, ensuring that findings

are not merely a result of chance but reflect consistent patterns or relationships. Johnson

et al. (2020) defined reliability as the dependability of results. Nha(2021) further

elaborated that reliability encompasses the soundness of the research methodology,

design, sampling techniques, and data analysis methods. Dependability is a crucial aspect

of reliability, referring to how a study's procedures, methods, and findings can be

replicated or repeated under similar conditions (Stenfors et al., 2020). Achieving

dependability means that another researcher could conduct the same study and obtain

trustworthiness of interview findings (Candela, 2019). By allowing participants to review

research by using member checking to achieve reliability and dependability. Member

checking is when researchers use evidence-based techniques to enhance the reliability

and credibility of the interview findings, improving the trustworthiness of the findings

(Candela,2019). To enhance the dependability of this study's findings, I allowed the

participants to review a summary of the interviews to check for errors and to confirm my

data interpretation.

Validity

Validity is paramount in qualitative research, ensuring the consistency and

dependability of research outcomes (Johnson et al., 2020). Researchers should

continually strive to maintain validity throughout the research process. Yin (2018)

emphasizes that qualitative researchers should capture the understanding of a

phenomenon by collecting credible details, ensuring data accuracy, using triangulation,

and performing member checking. According to Noble and Heale (2019), triangulation is

a method used to verify and establish validity by examining the research question from

expenses.” P1 uses two bank accounts: one to track all income and the other for all

for all sales in the business. Although the CPA is responsible for the books and tax

preparation, P6 is responsible for the monthly remittance of the sales tax. Using the POS

for all sales helped to make calculating the sale tax easy to compute

Recent studies have identified that automated accounting systems contribute

significantly to tax compliance regarding financial reporting accuracy, efficiency, and

transparency. Accounting systems are used for collecting, storing, processing, and

communicating financial and accounting data through financial statements to support and

guide organizational decision-making (Granyam& Ivungu,2019). Kuznetsova et al.

(2023) indicated that integrating computerized systems into accounting practices

facilitates compliance because of the coherence and accuracy in bookkeeping records,

which are minimal errors compared to manual processes. Automated systems also enable

inaccuracies.

2020). This kind of integration in technology supports the preparation of all tax-related

The literature confirms that automated accounting systems have arrived as a prime tool

for enhancing tax compliance, at least in today's highly digitized financial environment.

strongly to the TPB constructs of attitude and subjective norms. Business owners

generally view accounting systems favorably since these tools make compliance easier

and less prone to manual mistakes, allowing them to see through their finances very

clearly. The positive attitude, consequently, drives the adoption of such systems since

owners believe that such systems are reliable for making tax management less complex

and more effective. Again, subjective norms may occur, such as the perceived social

pressures to perform a behavior. The business community increasingly expects people to

use technology to manage their finances since accounting software is now considered

compliance. This social validation reinforces a positive attitude towards technology and

Theme 3: Education and IRS Guidance

The theme of education depicts a commitment to continuous learning. It seeks

immediate clarification from tax bodies so that business owners can keep abreast of all

federal, state, and local governments on taxes. Tax codes change frequently, so business

owners need to stay current. Education covers activities like understanding the business

structure and the tax requirement for the business structure, attending seminars conducted

by the Internal Revenue Service, being informed of any changes in tax laws, and

consultations with the representatives of the Internal Revenue Service to clarify complex

tax-related issues. By participating in continuing education and availing themselves of the

P1, P2, P3, and P5 highlighted how education is essential in their compliance

efforts. For Instance, P1 and P2 emphasized how important it is for business owners to

understand their business type and structure, as every business structure has a different

tax requirement. P1 stated, “Professional advice matters regarding business structure and

understanding the tax benefits and requirements associated with each.” P02 also said,

“Understand the business you are entering and the tax implications before you begin

operation”

Moreover, both accountants, P2 and P3, mentioned that regular attendance at IRS

compliance activities to accommodate those regulations. As P3 related, " I attend CPE &

requirements and thus comply with them. The shared experiences indicate that guidance

financial penalties. The participants' shared experiences demonstrate that business owners

recognize education and consultations with the IRS as helpful tools in maintaining

compliance and the long-term viability of the business.

business compliance since such regulations provide an enabling environment with an

putting the taxpayer in a better position regarding their duties, which, in turn, would

increase compliance levels. This research highlights how education programs demystify

the laws on taxation and bring compliance to real life for any business owner. According

to Hassan et al. (2023), the facilitating approach, such as education and guidance

The most crucial element of successful compliance is direct interaction by the

to ensure a compliance culture, particularly for SMEs with fragile internal resources.

Attitudes towards education and guidance by the IRS are critical in compliance as

resources. Most business owners develop positive attitudes towards engaging in

IRSprovided education and guidance since such serves to simplify complex tax laws,

reduce fear of non-compliance, and, at the same time, empower them with actionable

knowledge. This kind of positive attitude has them attending seminars, inquiring about

updates, and consulting with IRS officials without feeling that all these activities are

distressing duties but rather lifetime opportunities.

This qualitative pragmatic inquiry study aimed to explore and identify business

interviews with the participants in this study showed three significant themes. The

current and future business owners seeking effective strategies to comply with Federal,

assistance from a CPA, accountant, CFO, or bookkeeper. Professionals can aid a small

and their tax implications. Therefore, business owners should carefully select the

statements to support and guide organizational decision-making (Grayam&

accounting practices facilitates compliance because of the coherence and accuracy in

bookkeeping records, which are minimal errors compared to manual processes

also offers guidance on necessary record-keeping, income reporting, and other compliance

matters. In addition, business owners need to understand their business structure. Varying

of businesses. My focus was on the business owner or their accountant. Five of my

participants were business owners and two were accountants. Future research should

Conclusion

tax laws change so frequently that it is difficult for business owners to keep up. Similarly,

complying with federal, state, and local taxes can be very expensive for small business

owners. Findings from this study could help small business owners develop strategies to

comply with federal, state, and local taxes. Findings from this study show that complying

with federal, state, and local taxes depends on strategies such as professional assistance,

automated accounting systems, and education/ IRS guidance.

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