We just heard from one of the purchasers of the IRS Survival Guide for Real Estate Professionals with Real Estate Investors, available through www.TaxLoopholes.com. He’d already gone through the tough Real Estate Professional audit with the IRS audit teams for 2005, 2006, and 2007.

He’d had everything denied. He hired an expensive attorney and he proceeded to fight everything. All he’d gotten was a rising legal bill (figure as much as $50,000 in legal fees if you choose to go to Tax Court). The IRS Survival Guide gave him the straight answers no one had ever given him before. He realized that he really had no case.

It wasn’t the answer he wanted (he wanted to win), but he knew he would save tens of thousands in additional legal fees by doing the best deal he could with the IRS now. Sometimes the best advice you can get is knowing when it’s time to stop fighting and settle with the best deal you can get.

The IRS is gearing up for the next onslaught of audit attacks.  This time they’re after Sole Proprietorships aka Schedule C filers.  Remember if you have a Single Member LLC and have NOT elected how to be taxed for your business, you’re going to default right into the Sole Proprietorship category.

Based on the number of auditors moved over to this task force, you can figure that about 1 in 3 Sole Proprietorships is going to get tagged for audit.  If you have a Sole Proprietorship now or an LLC that is taxed as one, change it!

The IRS is cracking down on tax preparers that commit fraud.  And if you’re one of the people unlucky enough to get pulled into the claims that seem to be “too good to be true”, you’re asking for an audit.

In the past few months, the IRS has seized client lists for tax preparers who:  created fraudulent Schedule C businesses (Sole Proprietorships), reported real estate investments on Schedule E that didn’t exist, used C Corporations to pay 100% of living expenses and tried to write off all expenses through trusts. 

If your name is on the list because you requested information, they prepared a return for you or you innocently attended a workshop, you might get pulled in the net too.

If you get contacted for an office, contact our office.  We can help!  You can reach us through Richard@DKTaxServices.com or via phone at 888.592.4769.