Is the IRS After You?

I received another email today from one of our community members under yet another IRS audit threat. In a sec, I’ll tell you about this new one. But, first I want to apologize to you.

I didn’t do something back in 2003 that I should have. On January 8, 2003, I first broke the story about the IRS beginning an offensive against real estate professionals. If you were one of the 15,000 people who received my email back then, you might remember hearing about it. (Now there are 82,000 people who are in the clientbase, so it’s grown a lot since then.)

IRS Target #1: Real Estate Professionals

Beginning Fall 2007, the IRS began a massive campaign against real estate investors regarding real estate professional status and material participation. Basically, if you’re a real estate investor and have taken a loss on your tax return, you have a very high probability of being audited.

My mistake? I just mentioned that the IRS said they would audit real estate professionals. And I know that a lot of people didn’t pay a lot of attention to what I said.

I should have grabbed you and made you listen! I should have told you every chance I got! I should have showed up at your house and not let you have dinner until you listened! Okay, maybe that is going too far. The fact is I will never let that happen again. If I know something is going to happen, I’m going to do everything I can to make sure you listen.

Now, if you’re a real estate professional and have had a loss on your tax return over the past few years, all I can do is tell you to IMMEDIATELY get the IRS Survival Guide for Real Estate Professionals with Real Estate Investments. Go through step-by-step the questions the IRS auditor is going to ask you. Be ready!

NEW IRS Target #2: Small Business Owners

On August 6, 2008 I broke the story that we’d gotten our hands on a new IRS Special Report that is not going to be released until December 2003. This new study looks at where the most under-reported income is and defines their next target: the Sole Proprietorship (Schedule C) and capital gains calculation.

Now let’s add in the sneaky little portion of the new Housing and Economy Recovery Act of 2008 that requires credit card companies to report anyone with over $20,000 in sales and over 200 transactions in a year. How come this isn’t getting reported? Well it is here, because add that in with the new target of the IRS, Sole Proprietorships, and you have the makings of a huge IRS offensive.

What can you do about it? Form a business structure for your business today! Oh, and remember if you do have an LLC (limited liability company) that has just one member and no tax selection, you’ll be in the same category for audit purposes as a Sole Proprietorship. If you also accept credit cards (and most of us do), then you’re just asking for an audit.

In a few weeks, I will start regular Wednesday night teleseminars for my DKTS clients and everyone involved in the Business Builder challenge (signed up through my new site, www.HighTouchSystem.com) One of the first things we’ll talk about is this new audit challenge. I promise you, I’m not going to let this one go. The only people who will be surprised in 2 years when their Schedule C gets an intensive IRS audit will be people who never heard of me or those who made the conscious decision to put a bulls eye on their back.

NEW IRS Target #3: Anyone with Independent Contractors

Here’s an excerpt from the email that I got on Thursday:

“First, it was good to get to meet you and Diane and all the others at the weekend. I really know now it was a God thing and glad I made the long trip there. We have been in business for a long time and have worked through a corporation, an LLC and of course sole proprietorship. We have been with our CPA for many years and has done okay for us, we think, but we don’t get a lot of help and are usually reprimanded when we do ask for help.

As I sat in Diane’s last lecture and she briefly touched on Independent Contractors and said that without a contract or business entity there is no chance of getting Independent status. I froze in my seat. We use independents a lot and had no problems until last year with one person who didn’t want to pay his taxes after two years of getting his l099. Of course, he went to the IRS for redetermination and last week I received a determination that he is an employee, because, you guessed it. I didn’t have a written agreement, plus several other things.” From Loopholes of the Rich Charity Weekend Participant

This is just the beginning, I fear. Social Security is broke and if there’s a chance for the IRS to collect more Social Security tax by turning Independent contractors into employees, they will. I’m going to go into this and all other new IRS red flags in detail at the my October 2008 Tax Strategy Camp.

Plus, we’re going to go through, in detail, the proposed tax change plans and come up with detailed lists of what to do in December as soon as we know what is likely to happen.
Learn: • 3 Strategies if the Social Security Cap Comes Off • Corporate Traps to Consider Before You Become a C Corporation • Avoid the 60%+ New Proposed Tax Rate • Eliminate the Four HUGE IRS Audit Traps of the Next Four Years • Pick Your State for Tax Treatment • Making the Most Our of Tax Provisions Before They Expire

PLUS You’ll get a 67 Step Countdown for the rest of 2008. You find out what to do, day by day, to pay the least amount of tax, protect your assets and how to determine your own potential audit risk.

If you could just prevent an IRS audit that costs you tens of thousands of tax, penalty and interest, that would be worth 3 days out of your busy life in Phoenix, Arizona. But, there’s more:

EXCLUSIVE! Stephen Snyder, the nation’s most knowledgeable expert on credit scores, restoring credit and building credit, is coming back to the Tax Strategy Camp.

In 2005, Stephen came and the audience raved. I received HUNDREDS of emails asking when he’d come back.

The credit meltdown has affected millions of people in the US. Stephen is busy with a new television program in the works, so I had to do a little begging to get him to come talk to the TaxLoopholes community. I am so happy that he said yes! In fact, he’s only doing two live performances this year. And the October Tax Strategy Camp is one of them.

I’m sure you’ll agree just learning how to repair and increase your credit scores could make all the difference in the new few years of your financial life. And avoiding an IRS audit is probably right up there as well. Plus, how about learning how to prepare for big changes in tax law (and get the insider’s look on what is happening)?

This value-packed three days in Phoenix, AZ is a steal at $5,000. And, I’ll let you bring a guest along for free.

If you sign up now, you can get all that for the discount price of $2,500. I’m only going to let 27 tickets go for that price, though, and then I’m going to have to take down the early bird special.
We already have 23 of the 100 spots taken by insiders, so please don’t hesitate. Sign up today for the Tax Strategy Camp.

I’m afraid the IRS is just going to get more and more aggressive. The thing is, though, they let us know what they’re going to do years in advance. We’ve got an early warning signal for Sole Proprietorships, businesses that take credit cards and anyone who has independent contractors. There is something you can do now to prepare. Take action. Don’t pay penalties you don’t have to!