Re: My new CPA says I should file as a corporation???
I file as an S corp, but it is not poker/gambling related nor do I do it to try and dodge taxes, hide income, etc. I own a legit business.
I just received the following letter from my CPA this morning...
"Dear S Corporation Shareholder:
Due to the completion of the special IRS audit program on 5,000 S Corporation returns, it is anticipated that S corporations will be coming under more intense scrutinty by the IRS. Approximately 95% of the returns audited were found to have compliance problems. The Service is now armed with a lost of potential problem areas, and they will be on the lookout for returns that don't appear to comply. So what issues we believe they will be looking at?
Inadequate Compensation - not taking a salary or taking an unreasonably low salary.
Health Insurance - paid by the company
Loans - to and from your business
Employee Bonuses
Unreimbursed shareholder business expenses"
3 additional pages discussing the points above
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