Red flag deductions

Periodically the IRS alerted agents to be on the lookout for "Business Consultants" taking improper deductions.  The following are some high exposure categories:

  • Travel expenses
  • Meal and entertainment expenses
  • Losses where there is a lack of profit motive
  • C Corps with income that should be treated as "Personal Service Corporations"
  • Employees being treated as independent contractor
  • S Corps with little or no owner compensation
  • Donation of cars to a charity

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