INSIGHTS & IDEAS

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