How To Audit Proof Your Business From The IRS

How To Audit Proof Your Business From The IRS

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How To Audit Proof Your Business From The IRS

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SCHEDULE “C” CAN BE AUDIT PRONE, UNLESS YOU PLAN

The odds of being audited are based on several factors such as your income, industry, geographic area and the type of forms you file. Although income is considered to be the most dominant factor, the odds of being audited may not necessarily increase as your income does.

In some recent years, more self-employed individuals with income under $25,000 were audited than those with income over $100,000. “Self-Employed” often means “Schedule C”, which could be you.

Moreover, while a relatively small percentage of returns are examined via a face-to-face audit, a much larger percentage are audited via an IRS mail inquiry. Examples are penalty notices or requests for additional information.

Such mail inquires can lead to further inquirers and eventually a full-blown face-to-face audit. You want to prepare your return in a way that will prevent any type of IRS inquiry, even if it is not an audit.

While the following are no guarantee, most tax experts believe that these strategies can reduce or eliminate chances of a tax audit as well as those annoying mail inquires. The result: You will save on taxes, interest, penalties, fees and most of all, your time.

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