IRS audit is one of the most dreaded and misunderstood subject.The first step to relieving such stress is to keep proper records -They must be kept in such a way that the IRS can quickly and easily distinguish deductible and nondeductible expenses.If an IRS auditor will have to sit there and watch you sift through several boxes of documents to prove each and every daily deduction, then he/she will most likely disallow ALL deductions due to “failure to keep proper records.” Title 26 USC § 7203 -Willful failure to file return, supply information, or pay tax: In addition to the 20% Civil Penalty for Accuracy, there may be Criminal Penalties of up to $100,000 plus 5 years imprisonment (for each year).
IRS audit is one of the most dreaded and misunderstood subject.The first step to relieving such stress is to keep proper records -They must be kept in such a way that the IRS can quickly and easily distinguish deductible and nondeductible expenses.If an…