If the IRS suspects that you didn’t report all of your income, it can treat deposits in your business bank account as income. That’s what happened to one Chicago consultant who primarily advised businesses in Trinidad and Tobago. The Tax Court said the IRS method of reconstructing income from bank deposits is permissible.
For year-round tax planning and essential information, check out my tax books – find the complete list of books here – and the free online supplements for each tax book right here on my site.
J.K. Lasser’s Small Business Taxes 2014 has been nominated for a Small Business Book Award!
