Tip:
Highlight text to annotate it
X
The source of funds during an IRS audit. One of the additional issues that the IRS may
look at during an IRS audit is: How are you able to afford your groceries, if you have
expenses that consistently exceed your income? Now some of the things that the IRS does not
see and have access to is what your assets are that could be generating addition, that
could be generating sources of cash for you. But they can look at those assets from what
the income is that they're generating. And also your expenses. Your expenses may exceed
your income because you took on additional debt. That debt could be through loans or
credit cards debt. But that is one of the areas that the IRS does consider in determining
who an audit might be chosen for is, are your groceries an excess of your, your income?
So that is also something that you need to consider in your expenses and be able to justify
how you got from the beginning of the year and your overall financial picture with cash,
assets and debts. And the end of the year and your overall cash, financial assets and
debt. How are you able to afford those expenses with that level of income, considering your
assets and your debt.