Thursday, February 28, 2008

Audit Focus: Business's

The IRS concentrates on three areas of delinquent tax payers, those that have Schedule C (self-employed), Employer Business Expenses and erroneous dependents listed on returns. Business returns consist of 1120,1120-S and 1065 forms. The S -Corp audits are up .38%, and the partnership audits are up more .36%. Most audits are conducted on larger corporations, greater than $250 million in income (35.6%). Did you know that 8.7 million business returns were filed in 2006? and of this 0.6% were audited !

The numbers for the 2007 tax year will only increase. However the tax due on these audits are far less than individual audits. If I owned a business, I would be sure to pay my estimated tax payments or tax deposits ( when you have employees working for you) to prevent an audit of this nature. This in essence is stealing from the IRS and your employers.

No comments: