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At-Risk Groups Targeted by the IRS

What are your chances of being audited by the IRS?

Business Financial Solutions can help you stay off the target list by the IRS. However, if you an at risk group being audited by the IRS alreay, we provide effective representation. We also prepare accurate tax returns to help avoid the target list. And we assist non-filers with getting back tax returns filed and caught-up.

BFS can help clients with the proper setup for new businesses, minimizing the risk for audits and over paying taxes. We can help with maintaining accurate books and records for you company. It is important that payroll deposits are made on schedule and payroll forms filed timely. Additionally, BFS offers solutions for nearly all IRS tax problems, including past due tax returns and back taxes, penalties and interest.

High Risk Groups

The most recent high-risk groups targeted by the IRS are audit:

  1. Self-employed – You are at a higher risk for audit. This is defined as an unincorporated business. Or a profession in which net income is reportable by only one person. And the business is run usually by a person who owns a service business. They include beautician, tutors, or home service and repairs. They may also include professionals, such as doctors, lawyers and insurance agents and more.
  2. People Who Work Out Of A Home Office – As many as 40 million people work out of a home office. And there are at least 8,000 home-based businesses starting daily. Of these, 1.7 million claimed home-office deductions. These amounted to over $3.7 billion. So the IRS decided this group needed to be targeted. The people who take home office deductions comprise too large a portion of the underground economy.
  3. Independent Contractors – Every additional worker classified as an independent contractor means that the IRS potentially loses tax dollars. Because there may be tax loses through unpaid FICA, withholding, and unemployment taxes. Also the IRS loses money through income tax deductions as well.
  4. Non-Filers – An estimated 6 million people in the U.S. do not file any income taxes. Yet that number is actually down from 9 or 10 million four years ago. About 64% of non-filers are self-employed people who deal primarily in cash. They have been out of the system for an average of 4 years. And they are in their peak earning years. Futher, they live affluently in your community. As a group, non-filers account for almost $14 billion a year in lost revenue to the IRS. And the cost to each of the rest of us over $600 extra a year in taxes.

What to Do Next

Avoid being audited by the IRS as best as you can. However if you fall in one of these high-risk groups, Business Financial Solutions may be able to assist you, prior to an audit for individual or business taxes. But if you are already in the unfortunate position, and you are currently flagged for an audit, contact us. And we can help with IRS problems resulting from back taxes, current tax preparation and tax planning strategies.