The 2018 IRS Forum was a valuable source of information regarding the upcoming tax filing season. Among the many tidbits I gleaned were issues of IRS concern relating to small businesses. The IRS has announced they are going to scrutinize such things as: personal use of the business assets such as cell phones and laptops, lack of substantiation for auto and travel expenses, unreported income, spousal involvement in the operation of an unincorporated business, payments made to family members, home offices that don’t meet the IRS qualifications, hobby businesses that lack a profit motive, and employee versus independent contractor status of the business owner and any labor providers.
These issues will be scrutinized more than in previous years as the IRS moves to increase compliance and narrow the “tax gap.” The Treasury department has increased the IRS budget and more auditors have been hired. This is a sign of what is to come.
If you operate a small business, I recommend you call us to schedule a compliance review.
