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IRS targets small business audits

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in Small Business Tax,Small Business Tax Deduction Strategies

The IRS says it will focus on these eight areas in small business audits in 2013:

  1. Fringe benefits: Recent data show employers aren’t reporting personal use of company vehicles by employees.
  2. High-income taxpayers: The IRS will concentrate on taxpayers with a total positive income above $1 million filing Schedule C.
  3. 1099-K matching: The IRS plans to begin Form 1099-K matching under a new pilot program.
  4. Health insurance credit: This credit, which became available in 2010, will face IRS scrutiny.
  5. Foreign transactions: The IRS will vigorously pursue tax­­payers who try to hide income and assets overseas.
  6. Partnerships: Examinations will cover large loss partnerships and other abuses.
  7. S corporations: Emphasis will be on exposing losses in excess of basis on shareholder returns.
  8. Worker classification: Numerous employees are being misclassified as independent contractors.

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