Tax Fact #3: Small Business Owners Face A High Audit Risk
Fact: Small business owners are up to 940% more likely to be audited than W-2 wage-earners.
Business owners who are sole proprietors or single-member LLCs face a much higher risk of being audited than the average wage-earner. The IRS has targeted these taxpayers for increased scrutiny as it attempts to close the tax gap and reduce the federal deficit.