Free Risk Assessment
Audit Risk Assessment
Seven questions on the practices that most affect IRS audit selection, owner comp, personal expenses, cash controls, multi-state nexus, books cadence. Score your risk and see what to fix first.
Answer honestly. The score is most useful when based on actual practice, not aspirational practice.
1. Do you run personal expenses through the business?
Personal travel, meals, vehicle, household items paid by the business.
2. Do you have W-9s on file for every 1099 contractor paid $600+?
3. If S-corp: how does your salary compare to industry benchmarks?
If not S-corp, pick 'N/A'.
4. Do business expense amounts show as round numbers?
Round $1,000 meals, $5,000 vehicle, etc. signal estimation rather than documentation.
5. How much of your business is cash collections?
Cash businesses face heightened scrutiny.
6. If you sell across state lines: are you registered for sales tax where you have nexus?
Marketplace facilitator collection still requires registration in many states.
7. Are your books closed monthly with reconciliations?
Answer all questions to see your result.
Turn the score into a fix list
A risk score only helps if it becomes work. The items that most often need attention are owner compensation support, personal spending running through the business, and a monthly close that never quite ties to the bank.
Our CPA-led team cleans up the books and files the return off the same set of numbers, so what you report matches what your records can support.
Frequently Asked
Audit risk questions
- Is this score what the IRS actually uses?
- No, the actual IRS DIF (Discriminant Inventory Function) score is proprietary and includes statistical comparisons to industry norms. This assessment uses the underlying factors most commonly cited in IRS audit guidance and Tax Court cases. It's directional, not predictive.
- What's the highest-leverage fix?
- For S-corps: defensible owner compensation analysis. The IRS aggressively audits low salary + high distribution patterns; underpayment can mean six-figure assessments. For all businesses: separating personal and business expenses cleanly.
- If I've been doing things wrong, what now?
- Voluntary cleanup is dramatically cheaper than audit defense. Address the highest-risk issues first (personal expenses, owner comp, nexus), document the cleanup, and prevent recurrence. We do remediation engagements as part of standard tax + accounting work.
Keep reading
Schedule K-1
IRS form reporting a partner's, S-corp shareholder's, or trust beneficiary's share of income, deductions, and credits.
GlossaryQualified Business Income (QBI) Deduction
A 20% deduction on qualified business income from passthrough entities, available to most small business owners.
GlossaryBonus Depreciation
A 100% first-year depreciation deduction for qualifying property, permanently restored by OBBBA for post-January 19, 2025 acquisitions.
GlossarySALT Cap
The $10,000 federal cap on the deduction for state and local taxes paid by individuals.
Guide5 Bookkeeping Mistakes That Trigger IRS Audits
Most IRS audits start from patterns in the books, not random selection. Here are the five bookkeeping mistakes most likely to put you on the audit list.
Guide5 Owner Compensation Mistakes That Trigger IRS Scrutiny
How you pay yourself decides how much tax you pay, and how much audit risk you carry. Here are the five owner-comp mistakes that cost owners the most.