Episode 54: 5 IRS Audit Flags for Business Owners

Interested in Tax Strategy for your Business? Send us a message with your email address and we’ll help you get started!5 IRS Audit Triggers Every Business Owner Must Avoid in 2026. If you're running a business and taking write-offs, the IRS may already be watching. In this podcast, I break down the five biggest IRS audit red flags that get business owners flagged, and exactly how to avoid them.The IRS doesn't audit business owners randomly. They use algorithms to compare your tax return against thousands of other business owners in your income bracket and industry. If your return looks abnormal, you get flagged.First, I cover consistent business losses and why repeated losses on your tax return signal to the IRS that your business might be a hobby, not a real business. Then I explain how meals, travel, and lifestyle write-offs get business owners in trouble when personal expenses start getting disguised as business deductions.I also break down under-reporting income, one of the fastest ways to trigger an IRS audit, especially when your reported income doesn't match the 1099s the IRS already has on file. If you have income coming in from Stripe, Zelle, wire transfers, checks, or cash, you need to hear this.Next, I cover sloppy tax returns and rounded numbers, a red flag most business owners completely overlook. When every number on your return ends in zero, the IRS sees that as guessing, and that destroys your credibility.Finally, I explain why Schedule C businesses get audited more than any other filing type, and when it makes sense to move from a Schedule C to an S Corporation for better structure and lower audit risk.At the end, I break down the IRS 3-year audit rule, the 6-year rule for under-reported income, and why there is no time limit when fraud is involved.🆓  Download FREE PDF: 7 Write-Offs Every S-Corporation Business Owner MUST Know:   https://7taxwriteoffs.com/?el=podcast&htrafficsource=buzzsprout*Disclaimer This material & presentation content is for informational and educational purposes only. This material and presentation content is designed to provide general information regarding the subject matter covered. It is not intended to serve as legal, tax, or other financial advice related to individual situations. Because each individual’s legal, tax, and financial situation is different, specific advice should be tailored to the particular circumstances. For this reason, you are advised to consult with your attorney, accountant, tax preparer, and/or other advisor regarding your specific situation or your client’s specific situation. The information and all accompanying material are for your use and convenience only.