How To Reduce The Chance Of An Audit By Over 50 Percent

Perhaps you've been thinking about making a change
in your Choice of Entity. Maybe you've been asking,
"What type of Business Entity should my business be?"

By "Business Entity", I mean the legal structure
of your business, and there are basically
five from which to choose:

Sole Proprietorship

Partnership

Limited Liability Company (LLC)

"C" Corporation

"S" Corporation

This is not a question that is easily or quickly
answered. There are many factors to consider,
and here's one that is often overlooked:

If you are a Sole Proprietorship, your odds of getting
audited are two, three or even four times greater
than the other entity types.

Take a look at the following chart of IRS audit
rates for Year 2002:

INDIVIDUALS -- with Schedule C

Sales:

100,000 ............... 1.36

C CORPORATIONS

Assets:

http://www.irs.gov/pub/