The West Boca Chamber had a breakfast meeting at Boca Greens. The event included a breakfast buffet.
The crowd was a little smaller than usual but still a decent turnout. The speaker, Anthony Verni of Fresh Start Tax, gave a timely talk about taxes.
We went around the room introducing ourselves and West Boca must have the best slogan consultant. Chamber breakfasts are worth the visit just for those.
The Chamber has a new Executive Coordinator, Sherry Grandmaison, who was in
Mr. Verni talk was titled: Business Strategies For Avoiding Audit Pitf
The IRS has “ratcheted up” audits. They use the “DIF” system to score look for likely errors. They also look for certain items like “bad debt expense.”
They also look for various kinds of unreported income such as foreign bank accounts and other offshore investments or assets.
Tax law is very complex, including both laws, regulations and court cases. So Verni suggests that most people should hire a CPA especially if there are any unusual financial events such as liquidating an IRA.
Beware tax preparation mills. He’s seen a lot of problems from these.
Audits of small Schedule C filers have led to substantial additional taxes, ranging from $6K up to $25K or more.
Filing as Schedule C raises the chance of an audit. S Corporations are audited at about 1/8 as often as Schedule C businesses.
The IRS also will notice large fluctuations in income. It is extremely important to report all your income.
Most common flags: bad debt expenses, casualty losses, home office deductions, medical expenses, business travel, meal and entertainment expenses.
