5 IRS Red Flags Every Business Owner & Real Estate Investor Should Know

Could your tax return trigger a closer look from the IRS?

In this episode of the Know Your Numbers Podcast, Chris McCormack breaks down 5 IRS audit red flags that business owners, entrepreneurs, and real estate investors should understand.

Know Your Numbers Podcast • Episode 157

The goal isn't to scare you - it's to equip you with knowledge so you can better understand what the IRS looks for, properly document your deductions, and make sure your tax strategy is both legal and defensible.

Chris explains how today's technology allows the IRS to compare information across tax returns and third-party reports, making accurate reporting and proper documentation more important than ever. He also explains why proper bookkeeping, documentation, tax planning, and working with a knowledgeable CPA can give you greater confidence if the IRS ever asks questions about your return.

Key strategies in this episode:

• Five Audit Red Flags Overview

• Red Flag 1: Repeated Business Losses

• Red Flag 2: Unreasonable Compensation

• Red Flag 3: Mismatched Income Reports

• Red Flag 4: Questionable Deductions

• Red Flag 5: Claiming Active Real Estate Losses as a Passive Investor

The tax code isn't just a burden. When you plan ahead, it can become a blueprint for making smarter financial decisions and building long-term wealth.

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