What Should I Do if the IRS is Auditing My Small Business Deductions?
Posted in Offshore Account Update on October 16, 2026 | Share
Small business deductions are a common source of scrutiny from the Internal Revenue Service (IRS). If the IRS audits your small business, substantiating the deductions claimed on your business returns is critical to avoiding unnecessary liability. Learn more from Washington, D.C. small business tax attorney Kevin E. Thorn, Managing Partner of Thorn Law Group.
For small businesses, claiming all relevant deductions can help minimize federal income tax liability and maximize available cash flow. But small business owners also need to avoid overzealously claiming deductions and triggering IRS scrutiny. If the IRS is auditing your small business, understanding your liability exposure is the first step toward making informed and strategic decisions. Washington, D.C. small business tax attorney Kevin E. Thorn explains:
How Can I Confirm Whether My Small Business’s Federal Tax Deductions Are Valid?
When facing IRS audits, small businesses (and small business owners) must substantiate all deductions claimed in their federal returns. As a result, a key first step in an audit is locating all relevant documentation. This serves two equally important purposes:
- It allows for an independent assessment of compliance; and
- It ensures the small business (or small business owner) can substantiate compliance if necessary.
The IRS routinely scrutinizes small businesses' qualified business income (QBI), payroll, depreciation, mileage, and office space (including home office space) deductions, among others. Since improperly claiming any business deductions can lead to liability for back taxes, interest, and penalties, a comprehensive approach is key.
What if Any of My Small Business’ Federal Tax Deductions Aren’t Valid?
If your small business is facing an IRS audit and has improperly claimed one or more federal tax deductions, promptly consult an experienced attorney about what to do. While proactively addressing known issues is typically best, small business owners must be careful not to expose themselves (or their businesses) to unnecessary liability.
How Our Law Firm Can Help
At Thorn Law Group, we have extensive experience representing small businesses and small business owners during IRS audits. If the IRS is auditing your small business returns, we can help you make informed, strategic decisions and communicate with the IRS on your behalf. Whether your small business is in full compliance with the Internal Revenue Code or it has improperly claimed one or more federal tax deductions, we can work to achieve a favorable resolution that protects you and your business to the fullest extent possible.
Request a Call with Washington D.C. Small Business Tax Attorney Kevin E. Thorn
If the IRS is auditing your small business, we encourage you to contact us promptly. To request a call with Washington, D.C. small business tax attorney Kevin E. Thorn, Managing Partner of Thorn Law Group, call 202-349-4033 or tell us how we can reach you online now.
