The number of IRS audits

in 2007 increased. See my recent article “IRS ramps up audits” to learn more about what is causing this increase and is set. What can you do to be prepared?

# 1 build a defense for your rental property losses.

returns while the IRS has targeted to deduct losses from rental real estate if you are selected for testing, your rental property losses will be called into question. If you asked the real estate professional status, the IRS will ask you to prove that you are authorized. If you have applied, with the exception of 000 loss, you will be asked to prove that you meet the “active” threshold.

Here’s what you can do:

First, make sure you understand the rules for making your rental property losses. You can deduct to reduce losses from rental real estate taxes, but you are very specific rules. The knowledge of these rules in and you increase your chance that your test is to in no adjustment to your rental losses result.

Second, the document of your real estate activities. Good documentation is the number one defense you have. The IRS wants not only the number of hours, but also the activity that you did, and for your property or business. Need Help? I am here to help!

# 2 Clean Up Your Corporation />
The number of audits jumped SS Corporation in 2007. The IRS tries to specific items, here are a few of these articles, you should be aware of:

– your salary />
The moment you receive your salary is also important. Big capital benefits from one or two do not look like wages and could not be drawn into question.

– Your Distributions –
How much did you get distributions as and when did you get? smaller amounts, the distribution is more often than not paid as quarterly dividends. These amounts will be questioned!

Here’s what you can do:

your # 1 defense is the documentation. How do you get with the amount of your salary and the amount of your distribution? How do you determine if you are paying your salary, when distributions are? Once you documented this, you must ensure that your S Corporation pay is reasonable. To take a look at your salary and distributions, and wonder whether it makes sense for a company to pay these amounts.

You do not know what to do your S Corporation? Then you are in the majority, so that the IRS is a big day with these tests! Can I help you through the steps to take to determine the amount of your salary, the amount of your distribution and how you document at once so ready for an audit of IRS.

# 3 Support your spending

There are certain expenses the IRS will always appear in an examination. These expenses are travel, food and entertainment.

The No. 1 thing you can do is ensure that you can support this expenditure. The IRS will want to see who, what, when, where and why the individual cost. Who was there, what was the purpose of the economy than he was, where he was and why this effort was an ordinary or necessary for your business.

not know whether your documentation of an IRS audit right? I can help you!

Now you can see, the key to surviving an audit is properly documented with no changes. If you are among people who do not document that you should do, it’s not too late! Even if your documents are not ideal now in the past, a new beginning! Do you understand what you document and then on a daily, weekly or monthly, make sure that the documentation for the day, week or month is ok need. Once you get the hang, go back and begin to document what you do not have in the past. Remember, the IRS can be a return of 3 years after it was filed (and six years to determine whether the statement was filed substantially wrong).

IRS Audit Defense