ilmscore | IRS Audit RED FLAGS for the SELF EMPLOYED - IRS Audit Triggers

IRS Audit RED FLAGS for the SELF EMPLOYED - IRS Audit Triggers

Published: 2019-01-29
Status: Available | Analyzed

Predictions from this Video

Total: 6
Correct: 0
Incorrect: 0
Pending: 6
Unrated: 0
Prediction
Topic
Status
Deducting round, 'clean' figures for expenses like $1,000 for cell phone, $2,000 for supplies, or $5,000 for travel will be flagged by IRS algorithms as likely fabricated.
"if you are trying to deduct let's say your cell phone if you write cell phone expense 1,000 supplies expense 2,000 travel expense 5,000 it becomes blatantly obvious that it's just made up"
Tax Deductions
Pending
Reporting a net profit of exactly zero, where sales equal deductions, is considered suspicious and an audit risk.
"when you have your sales and your deductions equal exactly out to zero that looks fishy"
Profit Margin
Pending
Deducting $20,000 in meal expenses when sales are only $50,000 is considered very high and a significant audit risk.
"if you tell me or if you ask me there's 20,000 and meals sounds too high is that a red flag the answer is with just that variable that gross of value I can't give you a yes or no so let's say your sales are $50,000 then if you tell me 20,000 and meals yes that sounds very high and that would be an auto risk"
Meal Expenses
Pending
Claiming 20,000 miles for business travel is considered high for a bookkeeper but not for professions like sales or real estate agents.
"if you are in sales or if you're a broker like a real estate agent then twenty thousand miles does not seem high however if you are a bookkeeper and you tell me 20 thousand miles yes that seems very high"
Mileage Deduction
Pending
Claiming 30% or 40% of home space exclusively for business use in a home office deduction is considered pushing boundaries and increases audit risk.
"if you're going to claim something like 30 percent or even 40 percent you're really pushing the boundaries"
Home Office Deduction
Pending
If the IRS receives a tax form (e.g., for investment income, stock sales, interest income, W2-Gs) but it's not reported on the taxpayer's return, it will trigger an IRS letter and potentially an audit.
"if you receive that tax form then so do the IRS so if you don't report that you know they're gonna say this taxpayer received this income on this tax form and it's in our system but they didn't report it"
Unreported Income
Pending