J Darrin Gross
I'd like to ask you, Maya Weinreb, What is the Biggest Risk?
Maya Weinreb
Yes, I thought about this, I thought about this. I think the biggest risk right now, for real estate investors, for clients, for entrepreneurs, for individuals, for everybody right now, is the fact that the IRS just hired 87,000 new auditors. And you know, we saw articles about that a lot at the end of last year. And I don't know if they're all hired, and they're all implemented. But what does that mean to an individual? What does that mean to an investor? That means that they're, they're 87,000 times more likely to get audited, at least not saying I'm a mathematician, so maybe me No, that's not the exact math, you math it. But to me, that's 87,000 More people who could potentially go and audit your business, your investments. So it just makes it so that all of the things that you're supposed to do that you kind of said, well, no one's ever audited me and it's never really been a big deal. Now is the time to get all of your ducks in a row. Because you are have to map it correctly. Let's just say there's 87,000 More people who could try to audit you than there were before those 87,000 more resources to do that, because the IRS doesn't have time to deal with all of our stuff. Right? They're they're busy going after big fish. And we know ways. You know, there's many tax strategies to minimize risk to not look like you have a bunch of red flags that might get audited, and that's great. So we want to keep doing all those things. For instance, if you have an S corp To make sure you have payroll, that's the biggest red flag, you know, a lot of real estate investors aren't S corporations, their LLC, and so it's different. But sometimes they have holding companies that are s corpse, things like that. And if the IRS audits, you, they're gonna want to see your books, they're gonna want to see receipts for everything, they're gonna want to see bank statements. And on things like business meals, or whatever, that a lot of people not gonna say, a lot of people, some people every time they go to dinner, or have dinner by themselves will consider it a business expense. And the IRS is gonna want you to prove that it was a business expense, and who you went to dinner with. And that needs to be, you know, written on the receipt or in your books for it to make sense, your 1099 that you're like, Well, I'm not going to turn 99, the plumber because it's never really been that big of a deal. It might start being a big deal. There's there are rules written into the IRS code of what happens if you don't file a 1099 on someone, and you allow you know them to work for you under the table. And it's not that big a deal. There's rules and there's big penalties, there's penalties for filing a late 1099, there's penalties on not filing a 1099. And they have not that I know of to this day actually implemented those penalties because they haven't really had time to deal with all of the 1099 filing, for instance, as an example. But now they have 87,000 More people who might be taking a look at that. And in the IRS being the IRS, if they find something that you did wrong, they might try to go backwards and audit you the last seven years. So now is really the time to make sure that we have all our ducks in a row, that we're using the same tax return to get our investments that we use to file with the IRS that we are filing our 1090 nines on every single person that's a service provider, that we have detailed receipts on everything. And I think that while I hope that we can continue, you know, just being risk averse, and and not creating things that are red flags, I don't know that that's the case anymore, that might be changing. They might be you know, I'm really trying not to swear, they might be getting harder on us. And so in order to avoid risk to mitigate risk to minimize risk, you got to have all your legal bookkeeping, IRS ducks in a row. And I don't mean to say that there's some big monster that's terrible and scary, because they're not. And they're all you know, pretty much all IRS agents and auditors are nice people and they're helpful and they're just doing their job. And it's not to say don't go make money or go hide in a corner, you know, make money, they can't talk to you. If you're not making money, go do something, you know, go go buy that property, go do that cool thing you're doing. But just have all your ducks in a row so that nothing can ever come back and build, you know, tear down your empire that you built.