Has any mystery shopper ever been audited by the government during your years of mystery shopping?????

I'm more likely to get audited for being a medium than a mystery shopper. I read the auditor, she got a message from a dead aunt of hers and she declared me legit.

To the original question, I personally have not run into a shopper who has been audited and I have not been audited myself. I am very careful to have my tax claims carefully documented because should I ever get audited I want to not only have the backup materials but also the information I used to make me believe a particular item/issue was deductible.

I have been audited once in my life and it had to do with moving expenses because they were over the end of one year and the beginning of the next. I claimed them all in the year that the physical move occurred. IRS told me that I needed to revise my returns to claim the expenses in the year incurred. Because I could explain my thinking of why I had taken the deductions as I had, there were no penalties and such. By revising my returns for the two years, I actually came out about $400 ahead because the additional expense on the first year's return dropped my tax bracket while it made little difference to the second year.

My dead uncle has declared that you cheated, Cettie.

I know two shoppers that were audited back in 2005 and 2006.
They passed their audits w/flying colors and had no problems w/IRS concerning their mystery shopping reporting/accounting on their tax returns.
One also sold AVON and the other one had a full time job in a retail store.
I have lost touch w/them over the last year.

In 2007, IRS was supposed to audit more tax filers of SCH C but I don't know their plans for 2008. As long as you keep good records and can account for all you enter on that SCH C........I can't see how you would have any problems w/IRS in the event of an audit.




Edited 1 time(s). Last edit at 12/27/2008 09:17PM by bugspost.

IRS apparently audits people who are self-employed more than employees of a big corporation. We have had three home-based businesses in our home, not to mention my now going-out businesses of merchandising and mystery shopping. We have been audited two or three times. There wasn't anything obviously amiss, but I think one time we had to pay but it was years ago so I don't remember details. I'm not the tax preparer in the family. The sad thing is that my husband has been doing income tax reports since he did one for his mother at age ten, so it's not like he was making mistakes. He has also done them for other people. Another time, we had some records come in late that my husband added to the amended report after we were audited, so we came out better than before.

Last year, for the first time, I gave my husband a list of miles traveled while mystery shopping, but he refused to use them on the income tax report because I had just taken where I'd been and added miles I knew I'd traveled rather than writing them down every day. Once burned, twice shy. The daily part would drive me crazy. I know the exact mileage to most of my stops, door to door.

I think that a person who has an occupation (such as teacher or receptionist, for example) that can be listed as the main one that does not include something that would attract the attention of the average IRS agent would do better. I know someone in politics (not as a candidate) who was audited several years ago when our state was trying to remain Democrat. She learned that a political enemy reported her to IRS. My friend was self-employed and had not done anything wrong. The culprit accidentally revealed knowledge of the audit in conversation. It just goes to show that, just as a neighbor can report you to Child Protective Services out of revenge (also happened to a friend who was homeschooling), so can political enemies report you to IRS. I guess they have to investigate even if there is nothing wrong.