Have you ever been audited by the IRS? Do you know what compliance issues are? If not, don’t worry, you’re not alone. Many business owners and individuals don’t know what compliance issues are until they’re audited. A compliance issue is any action or inaction that could put your business at risk of being non-compliant with government regulations. Examples of 10 compliance issues include:
- Conducting business with embargoed countries: The United States has a number of economic sanctions in place against other countries. These sanctions are put in place to punish the country for bad behavior, such as human rights abuses or weapons proliferation. If your business conducts any transactions with individuals or businesses in embargoed countries, you could be at risk of being non-compliant.
- Not following safety regulations: Businesses are required to follow safety regulations set forth by OSHA. This includes having proper safety equipment, training employees on how to use it, and maintaining a safe workplace.
- Failing to register with the government: Businesses that operate in certain industries are required to register with the government. This includes businesses that sell or manufacture food, drugs, medical devices, or cosmetics.
- Failing to pay employment taxes: Businesses must pay employment taxes, such as Social Security and Medicare taxes, on employee wages. Failure to do so can result in penalties and interest charges.
- Failing to comply with CMMC requirements: The compliance management maturity model (CMMC) is a framework for assessing and improving compliance management practices. Businesses that do not comply with CMMC requirements may be subject to audit.
- Violating environmental laws: Businesses that violate environmental laws can face large fines and even imprisonment. Some common violations include releasing pollutants into the environment without a permit, illegally disposing of hazardous waste, and exceeding emissions standards.
- Operating without a license or permit: Certain types of businesses are required to have a license or permit to operate legally. Examples include restaurants, hair salons, and child care centers.
- Engaging in illegal activities: This one should be obvious, but it’s worth mentioning. Engaging in any illegal activity can put your business at risk of being shut down and you could face personal criminal charges. For example, selling illegal drugs or counterfeit goods is a surefire way to get in trouble with the law.
- Not complying with advertising laws: There are strict laws governing advertising, especially when it comes to truth in advertising claims. Some common compliance issues include making false or misleading claims, not disclosing required information, and using unapproved marketing practices.
- Making fraudulent claims: Fraudulent claims can result in significant fines and penalties. Examples of fraudulent claims include making false statements on tax returns or insurance applications.
These are just a few examples of compliance issues that businesses face and compliance should not be taken lightly. If you’re not sure whether or not your business is compliant with all applicable laws and regulations, consult a business attorney or compliance specialist. They can help you ensure that your business is on the right track. It’s important to be aware of the compliance requirements that apply to your business and take steps to ensure that you’re in compliance. Otherwise, you could find yourself facing hefty fines or even criminal charges.
