 |
|
|
30212 Tomas, Suite 200
Rancho Santa Margarita CA 92688 |
15 Common IRS Red Flags 1. Math errors 2. Returns that are filed without the necessary supporting tax return schedules 3. Unrealistic figures (such as frequent occurrence of rounded numbers) 4. Major, not easily explainable, changes in comparison with prior tax returns 5. Certain occupations where payments are commonly made in cash (for example hairdressers) 6. Non-incorporated businesses reported on a Schedule C (Large amounts of income make this even more of a target) 7. Home office expenses shown on Form 8829 8. Interest or dividend income that does not agree with 1099 amounts submitted to the IRS 9. High mortgage interest in relationship to income 10. Travel and entertainment expenses that exceed the industry norm 11. High damage or theft loss deductions 12. Low S Corporation shareholder salaries in relation to other distributions. 13. Business losses several years in a row 14. Deductions for "independent contractors" (versus employees) on business returns 15. Use of offshore trusts or credit cards |
