{"id":994,"date":"2013-06-13T08:22:16","date_gmt":"2013-06-13T12:22:16","guid":{"rendered":"http:\/\/keysolutions.us\/blog\/?p=994"},"modified":"2013-06-13T08:27:01","modified_gmt":"2013-06-13T12:27:01","slug":"audit-proof-your-business-from-irs-audits-part-1","status":"publish","type":"post","link":"https:\/\/keysolutions.us\/blog\/audit-proof-your-business-from-irs-audits-part-1\/","title":{"rendered":"\u201cAUDIT PROOF\u201d YOUR BUSINESS FROM IRS AUDITS \u2013 Part 1"},"content":{"rendered":"<p>According to the Associated Press, the Internal Revenue Service increased audits by nearly 11 percent from 2010 to 2011. Ouch!<\/p>\n<p>An IRS audit reverses the constitutional presumption of innocent until proven guilty because you are presumed by many an IRS auditor to be guilty of underpaying your taxes. Makes you want to do anything to \u201caudit proof\u201d your business . . . right? Of course.<\/p>\n<p>The problem is that you can\u2019t audit proof your business and anyone who claims that you can is either misinformed, na\u00efve, or a shameless charlatan. While you can\u2019t actually \u201caudit proof\u201d your business, you can minimize the risk of an IRS audit by understanding how the IRS targets business owners. The IRS is most interested in:<!--more--><\/p>\n<ul>\n<li>\u00a0Cash businesses<\/li>\n<li>The percentage\u00a0of credit card sales (obtained from the new 1099-K reporting requirements)\u00a0to total sales which may indicate the underreporting of cash sales<\/li>\n<li>Auction and online businesses<\/li>\n<li>Self-employment\u00a0deductions<\/li>\n<li>Executive\/shareholder\u00a0compensation and fringe benefits<\/li>\n<li>Related party\u00a0rentals<\/li>\n<li>Worker\u00a0classification between employees and independent contractors and Form 1099\u00a0compliance<\/li>\n<li>Hobby losses<\/li>\n<li>Construction\u00a0industry<\/li>\n<li>Passive activity\u00a0losses (e.g., losses from rentals &amp; partnership investments)<\/li>\n<\/ul>\n<p>Key IRS audit initiatives include reconciling income (comparing the business\u2019s revenues to bank deposits), reviewing related party returns, employment tax exams by the IRS and the Dept. of Labor, and having IRS personnel trained to review transactions recorded in QuickBooks, Sage, etc. and other software programs to identify \u201ccorrecting\u201d transactions.<\/p>\n<p>Because each business and how it operates is different, each company\u2019s unique factors need to be analyzed when evaluating its potential exposure to an audit.<\/p>\n<p>We invite you to call 610-594-2601 today to make an appointment to discuss your audit exposure. You can also schedule a free consultation at\u00a0<a title=\"our website\" href=\"http:\/\/www.keysolutions.us\/consultation.htm\" target=\"_blank\">our website<\/a>.<\/p>\n<p>The author wishes to thank Businesswriters.biz for its contributions to this article.<\/p>\n<p>Copyright \u00a9 2013 Keystone Financial Solutions, P.C. \u00a0All rights reserved. \u00a0BE SURE TO READ THE DISCLAIMER PAGE: Content in this blog is for educational purposes only and should not be considered as the rendering of tax, legal or investment advice. The publisher of this blog makes no representations as to the accuracy or completeness of any information herein, will not be liable for any errors or omissions, and shall not assume liability for any losses, injuries, or damages from the display or use of this information.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>According to the Associated Press, the Internal Revenue Service increased audits by nearly 11 percent from 2010 to 2011. Ouch! An IRS audit reverses the constitutional presumption of innocent until proven guilty because you are presumed by many an IRS auditor to be guilty of underpaying your taxes. Makes you want to do anything to [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[3],"tags":[],"class_list":{"0":"post-994","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-irs-tax-planning-ideas-tips-news","7":"entry"},"aioseo_notices":[],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p9W9tf-g2","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/keysolutions.us\/blog\/wp-json\/wp\/v2\/posts\/994","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/keysolutions.us\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/keysolutions.us\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/keysolutions.us\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/keysolutions.us\/blog\/wp-json\/wp\/v2\/comments?post=994"}],"version-history":[{"count":14,"href":"https:\/\/keysolutions.us\/blog\/wp-json\/wp\/v2\/posts\/994\/revisions"}],"predecessor-version":[{"id":1008,"href":"https:\/\/keysolutions.us\/blog\/wp-json\/wp\/v2\/posts\/994\/revisions\/1008"}],"wp:attachment":[{"href":"https:\/\/keysolutions.us\/blog\/wp-json\/wp\/v2\/media?parent=994"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/keysolutions.us\/blog\/wp-json\/wp\/v2\/categories?post=994"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/keysolutions.us\/blog\/wp-json\/wp\/v2\/tags?post=994"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}