Most taxpayers think about audits only after an envelope from the IRS shows up. By then, the outcome is already largely decided — not by what you say to the examiner, but by what records you kept two or three years ago. An audit is not an accusation. It is a request to prove what you reported. Taxpayers who lose audits usually did not cheat; they simply cannot substantiate a deduction they were entitled to, or they cannot explain a bank deposit that was never income in the fi

If you're a freelancer, sole proprietor, or small business owner, filing Schedule C with your tax return is part of your routine. But it’s important to know that some entries on that form can raise questions with the IRS. While most small businesses won’t face an audit, certain red flags can increase your chances of receiving IRS correspondence, a notice, or a closer look at your return.