Recent public announcements and internal memos to IRS agents give us an indication of some areas that will be scrutinized heavily in the coming months. Several areas to note:

Tax returns for S corporations have been statistically shown to have a very high error rate – 68%. Look for increased audits on these entities focusing on travel expenses, meals and entertainment, automobile expenses, and the big favorite, taking dividends in lieu of compensation to avoid payroll taxes.

Refund claims involving R&D credits are being looked at closely.

Random audits of payroll tax returns will commence next month. This is an area that has historically received little attention but is on the “A” list now. Agents will be looking to classify independent contractors as employees, and making sure fringe benefits are taxed properly.

Appraisers and valuation professionals will be on the hook for their work too. If an appraiser improperly misstates a value resulting in an overstated deduction or a lower tax, the appraiser could be on the hook for some large fines.

These are a few of the areas IRS will be focusing their sights on. If any of these apply to you it would be wise to get your ducks in order before you find out too late that its duck season!