This is the story of Nathan E. Lang. And it doesn’t have a happy ending.
When it came time to file his taxes, Mr. Lang claimed $16,327 as employee expenses and $17,875 in proprietor expenses on Schedule C.
The IRS audited him and didn’t allow him to deduct a single penny.
In all, Mr. Lang lost a total of $33,226 in tax deductions and after taking his case to court and losing there too, he had to pay an accuracy-related penalty of 20% on the taxes he owed.
So what did Nathan Lang do wrong?
He kept bad records.
That’s right. Mr. Lang got interested in recordkeeping only after he was called in for an audit.
Which is why I’m writing to you now. I don’t want you to make the same kinds of mistakes and wind up in the IRS’s crosshairs.
If you want to find out how to stay out of big trouble…
Before an audit notice arrives…
Before you start to fabricate records (a terrible idea!)…
Before you start losing sleep…
Take my advice.