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Protect Your Business: How to Help Minimize IRS Audit Risks for Executive Compensation

ARTICLE | October 01, 2024

Authored by Vasquez + Company


With the IRS intensifying its focus on executive compensation and fringe benefits, companies must implement compliance to avoid audits. The article “Help Decrease the Chance of an IRS Audit” outlines the types of executive perks under scrutiny and offers essential steps to mitigate the risk of an IRS audit.


Key Points:

  • IRS Focus: The IRS is expanding its audit initiatives from large corporations to smaller businesses, emphasizing the importance of accurate reporting of executive compensation and fringe benefits.
  • Common Fringe Benefits: The article highlights various executive perks that may be taxable, including corporate credit cards, relocation costs, and private jet use.
  • Audit Procedures: It outlines the IRS’s three-step process for assessing the taxability of fringe benefits and the rigorous steps auditors may take during their review.
  • Compliance Strategies: Companies are urged to consult with tax advisors to verify their executive compensation plans align with IRS regulations.


By recognizing the potential risks associated with executive compensation and implementing sound reporting practices, businesses can reduce the likelihood of facing an IRS audit.


For more information, read the full article here.

 

Our firm provides the information for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. This article is not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided “as is,” with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.

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