| Who's afraid of the IRS? Let's face it: We all are! And | | | | myths and misconceptions. |
| with good reason. IRS horror stories abound, and we | | | | 2. Keep these audit rates in mind when deciding what |
| all know someone who's been through an IRS audit | | | | deductions to take. I am not recommending that you |
| and barely lived to tell about it. | | | | cheat on your tax returns, but I am suggesting that you |
| So the purpose of this article is to help calm those | | | | consider being more aggressive. If the item in question |
| fears. Maybe I can't remove them completely, but I do | | | | is not fraud, and if you have at least an arguable |
| hope you find some comfort in what I'm about to tell | | | | position, these low audit rates lend merit to the old |
| you. | | | | saying "when in (reasonable) doubt, deduct it". |
| Do you have any idea how many tax returns are | | | | 3. The low audit rates should NOT give you reason to |
| audited every year? About 1%, give or take a few | | | | become sloppy in your record keeping. Please do not |
| tenths of a percent, depending on how much money | | | | take the attitude, "Well, since there is such a small |
| you make, what type of business entity you own, the | | | | chance of being audited, why keep records at all? |
| size of your business, and where you live (yes, audit | | | | Who needs all this paperwork?" |
| rates do vary somewhat from one part of the county | | | | Who needs to keep accurate records of income and |
| to another). | | | | expense, even if the odds of an audit are low? You |
| Think about this for a moment -- your chances of | | | | do. |
| getting audited are probably about 1 in a 100. Do you | | | | If you are serious about being successful in business, |
| like those odds? I sure hope so. | | | | you will want to know how the business is doing, right? |
| The IRS doesn't have the resources to conduct wide | | | | And if you think that a positive checking account |
| scale audits. That's just the way it is. | | | | balance is an accurate indication of the success or |
| How should this good news about IRS audit rates | | | | failure of your business, you are mistaken. |
| effect you? Rather than fearing an IRS audit, here are | | | | Successful business owners keep their finger on the |
| three reasons to benefit from the unlikely possibility of | | | | pulse of their business every week. They know how |
| being audited: | | | | much is coming in (and why), and they know how |
| 1. When it comes to your attitude toward the IRS, | | | | much is going out (and where and why). |
| cheer up and take heart. The likelihood of an audit is | | | | Successful business owners maintain accurate |
| slim. I meet people everyday who appear to be | | | | financial records so they can make sound business |
| well-adjusted and successful, but just bring up those | | | | decisions to increase sales, minimize expenses, and |
| dreaded letters, "IRS", and they turn into a paranoid | | | | multiply profits. If your attitude is anything less than that, |
| basket-case. | | | | your business is doomed to fail. |
| There's no need for such irrational fear. You've seen | | | | While the chances of being audited are low, so are the |
| the numbers. Let the facts control your emotions, not | | | | chances of being successful without good records. |