Florida Tax Lawyer Blog

Freelancers - those who work on short contract or a single-assignment basis for other firms - and small business owners are more likely to face an IRS audit in Miami than those who work for larger corporations.

Miami tax audit attorneys understand that undergoing an audit can be stressful and time consuming. This is especially true when you are trying to handle this alone. It can almost seem as if life stands still while you are working through the process, especially when you know that the IRS does everything it can to find even the slightest violation of tax law, even if it was completely unintentional.

Freelancers are going to be facing even more scrutiny. A recent Reuters article - written by a freelance journalist - sought to explain this.

First, nearly 30 percent of all employees listed themselves as free agents in 2006. Free agents are basically people who perform temporary freelance or contract work or who are in consulting or who run their own business. That figure is according to the Kelly Services 2011 Free Agent Survey. What's more, that figure has since ballooned. In fact, it now figures to 1 in every 4 workers is a free agent.

With a growing number of workers being added to this category, the IRS wants to make sure that they are each filing their taxes the right way.

In 2010, almost 25 million people filed their taxes as sole proprietors. Using the Schedule C forms, they report either a loss or profit of a business that is not incorporated. The chances of Schedule C operations being audited are almost twice that of a larger corporation. In fact, while about 1 percent of corporations are audited, about 3 percent of small businesses undergo that scrutiny. That means they are three times as likely to get audited.

The IRS doesn't even shy away from admitting this. In fact, of their three online videos that detail the auditing process, every single one features a case involving a small business owner.

The reason has to do with the fact that the IRS usually finds more omissions and errors from these entities. That's usually because smaller operations and freelance workers don't usually have an accountant or CPA who is checking every detail - and tax code can be very complex.

Additionally, a number of freelancers and small business owners report some or all of their income to the government, but they may unwittingly deduct a laundry list of expenses that they aren't supposed to. Overstating those deductions can decrease how much you owe the government, but it's not a risk worth taking because it's all going to come out in the event of an audit.

The point is that small business owners and freelancers don't need to panic - but they should be prepared. Having an experienced Miami-Dade County IRS tax audit attorney checking all of these facts for you is going to help a great deal in the long run. This is because while the IRS is going to try to squeeze you for every last nickel they can, an audit lawyer is going to be looking out first for your interests. Having someone to not only assist you with the back-and-forth communication but also in assuring that the paperwork is correct is going to relieve you of huge headaches later on.