Friday, July 10, 2015

Tips from a Tax Attorney: Audit Red Flags

Many businesses get in trouble with the IRS regarding their taxes. What’s unfortunate is the common issues can be avoided easily by keeping your business in check. A tax attorney anywhere will advise you to minimize your risks of getting audited by staying on top of your company’s money matters. Here are a few examples of red flags that could make the IRS push for an audit. 

Cash Only
Businesses that deal with a lot of cash are always on the hot seat. Expect the IRS to be extremely thorough with your records. To avoid any trouble, make sure that you file your taxes on time. 

Lifestyle Check

You could get in a lot of trouble if your lifestyle does not match your reported income. Many businessmen are inclined to do this and often find themselves getting audited by the IRS. The best way to avoid this is just to be honest. Report all of your significant business income and seek advice from a tax attorney if you’re already in hot water. 

Business Expenses

Business expenses of any nature are closely monitored by the IRS. Costly personal expenses which you claimed as a business expense is enough to get the attention of the IRS. An efficient accountant can help you itemize your deductions and make sure that everything is done according to the rules. If your business’ finances, however, has become a legal matter, a tax lawyer is the best person to go to.

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