California corp.

Wow. It'd be great in these groups if folks would just relax a little bit.

I said there are no red flags, because I really didn't want to get involved
in a circular argument with Mike. It's clear that the IRS identifies
certain ratios and expenses and increases the likelyhood of an audit. Does
anyone abosultely know exactly what every one of these are? No. And I
didn't want to have to go through all of that. It was easier just to answer
with tougue in cheek.

r.

"Tony Cox" wrote in message
hlink.net...
"Rob Thomas" wrote in message
...

Mike, you're correct. There are no red flags.

How would you know?

Each year (as I understand it), the IRS top brass have a
meeting to decide exactly what criteria will be used to
decide who gets audited. This is in addition to the 'base
rate' random auditing. Anything 'unusual' can only increase
your chance of being audited if it is statistically worth
devoting the auditors time to it. Tax fairness be damned;
its the $$$'s they want.

A one-man LLC grossing (say) $250K while expensing
25% of that in travel expenses (depreciation, operating
expenses, recurrent training) is certainly 'unusual', and
likely to yield the 'low hanging fruit' that the IRS auditors
love to munch on.