Did you forget to report all of your business sales or receipts? If you failed to report significant

If the IRS is auditing your small business, you should do two things: First, prepare for the audit. book tickets and celine dion and las vegas (For information on this, see Preparing for a Business Audit.) Second, learn what the IRS auditors are looking for when they examine your business.
Be aware that the IRS training manual book tickets and celine dion and las vegas tells its auditors that they are examining you, not just your tax return. The auditor wants to see how you match up with the income reported on your return economic reality in IRS-speak. If your business is audited, the IRS is likely to investigate the following issues:
Does your lifestyle square with your reported income? An auditor sizes you up for dress, jewelry, car, and furnishings in your home or office, if given a chance to make these observations. Someone book tickets and celine dion and las vegas who looks like a Vegas high roller, with the tax return of a missionary, will cause any auditor to dig deeper.
Did you write off auto expenses for your only car? Personal use of your business-deducted set of wheels is so common that auditors expect to find it. That doesn t mean they will accept it, however. Auditors don t believe you use your one-and-only auto 100% for business and never to run to the grocery store or the dentist. If you operate your car for both business and pleasure and claim a high percentage of business usage, keep good records book tickets and celine dion and las vegas (preferably book tickets and celine dion and las vegas a mileage log).
Did you claim personal entertainment, meals, or vacation costs as business expenses? Travel and entertainment business expenses are another area where the IRS knows it can strike gold. Document all travel and entertainment deductions. Taking buddies to the ball game and calling it business book tickets and celine dion and las vegas won t fly if you can t explain the business relationship in a credible fashion.
Did you forget to report all of your business sales or receipts? If you failed to report significant business income $10,000 or more strongly consider hiring a tax pro to handle the audit. Remove yourself from the process altogether.
If the auditor finds evidence of large amounts of unreported income, and it looks intentional, he may call in the IRS criminal investigation team. However, if there is any kind of halfway plausible explanation ( Someone must have forgotten to record September s sales ), then don t worry about jail. The auditor will probably just assess the additional tax you should have paid in the first place, plus interest and a 20% penalty.
Did you write off personal living costs as business expenses? Let s face it, every small-time operator has claimed a personal expense as a business one. For little things, such as a few personal book tickets and celine dion and las vegas long-distance calls on the business telephone line, the IRS won t get too excited. But if you deducted $2,000 in repairs on your motor home during a trip to Yellowstone, an auditor may figure this out by looking at your receipts and disallow it, with a penalty book tickets and celine dion and las vegas added.
And last but not least, if you hire people you call independent book tickets and celine dion and las vegas contractors, are they really employees? The IRS routinely conducts audits of businesses that hire independent contractors, because of the tax savings associated with hiring contractors instead of employees.