Question: Is the IRS still paying special attention to sole-proprietors? I read several years ago that they hired a bunch of new agents to go after sole-proprietors and corporations with one employee. I wonder if these groups are still most at risk for audits. Please only answer if you have a good reference or are knowledgeable on the subject. Thanks.

Answer: Sole proprietors dealing in horses, boats or always showing a loss are looked at hard to make sure they are a business and not a hobby.\nS-corps with income and littleor no salary to the owner's are being targeted because of the impact on the social security taxes.
This question from the Yahoo Q&A forum is categorized in the topic: Sports