Painting contractors face higher audit risk than the 1% average because the IRS targets small business owners who have enough income to pursue but often can't afford to fight back. Recent IRS funding means more audits are coming, so keep detailed records and file accurately.
Chapters
on average, like you have a 1% chance of getting an IRS examination. Is that the— and that's kind of the one that's thrown around, I think.
Yeah. So the world is not fair and the IRS, like, like any service, is going to go after the low-hanging fruit. Take this with a grain of salt, but they say that people who don't make very much money and people who make a lot of money hardly ever get audited because the people who don't make a lot of money don't have taxes that are worth going after. But the people who make a ton of money, they can afford the fancy lawyers and CPAs who grind this thing out until there's nothing left. But the small to medium business owners, they're the ones who get targeted the most because they simply don't have the resources to fight to fight examinations. And there's usually enough money going in and out of the business where it makes sense for the IRS to try to do enforcement and examinations. So I'm not saying this to scare anyone. It does emphasize that we need to dot our i's and cross our t's, have our record keeping, do things the right way. There was a press release where the IRS has publicly said that they're going to be stepping up collections efforts. Congress has freed up a lot more money to hire new agents and get the service back up to speed. So these things are not going to get swept under the rug for much longer. And we're going to see a lot more examinations and a lot more collections actions starting, starting about now and moving into the future. If you're doing things right, you have nothing to worry about. And we want to make sure to help you do things right.
