Mythbusters: IRS Audits Misconceptions Part 3
There’s also audit situations where the IRS looks at corporate returns and certain line items that have glaring values. Cost of good sold, for example, is one, they’re looking at a cost of good sold, and they’re seeing that it’s really outside of the scope of the normal course of business for that type of company.
And they’re actually looking to see if there’s money laundering going on, and they pull it for audit and they’re auditing, but they’re really looking for money laundering. And then my favorite, I say chuckling, is employment audits. The IRS is constantly looking to audit whether you have an independent contractor relationship or an employment relationship with your employees, and that’s something that’s very common.
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