sole proprietorship

We’ve talked a lot about the more aggressive IRS audits for real estate professionals and real estate investors. I received an email from one of the TL Community members who had just gone through an audit of cell phone usage. And, we have warnings now of increased audits for small businesses, especially Sole Proprietorships, and anyone who has capital gains.

My husband, Richard, gets a call almost every single day from someone who has just gotten an IRS notice or just gone through an IRS audit. And, at the same time, my clients haven’t gotten audited. None of them.

My tax wire this morning contained a Notice from the IRS regarding a new Fact Sheet on hobby businesses.

The IRS tends to put out Fact Sheets when they’re seeing a problem come up over and over again, or when they’re anticipating a problem with public understanding. Given the subject matter of this Fact Sheet, my guess is that sole proprietorship audits are going to increase again next year.