Thanks to our partners Promotive and Wicked File

Are you unknowingly doing things that make the IRS take a closer look at your shop?

What if one “small” filing mistake dramatically increases your audit risk this tax season?

In this episode, Hunt Demarest walks through the most common tax mistakes that raise red flags with the IRS — and why many well-intentioned shop owners accidentally put themselves in the audit spotlight every year.

Drawing on real audit cases from auto repair shops, Hunt explains how filing late, amending returns, underreporting income, and mismatched 1099 reporting can quickly escalate into full-blown audits, even when nothing dishonest was intended.

This episode also breaks down why Schedule C amendments are especially dangerous, how credit card deposits and sales tax reporting can trigger IRS scrutiny, and what shop owners should do before filing to minimize risk, close the books cleanly, and move into the new year with confidence.

What you’ll learn…

(03:00) Understanding IRS audits and common mistakes

(05:45) Hunt’s personal experience with being audited

(06:40) How to prevent ever getting audited

(09:00) What actually increases audit risk — and what doesn’t

(11:50) Income reporting and its applications

(15:05) The impact of K1’s and other income sources

(17:55) High-risk income types and their audit potential

(21:15) Losses and their effect on audit risk

(24:00) Filing strategies to minimize audit risk

(27:00) Final thoughts on tax preparation and audits

Thanks to our partner Promotive

It’s time to hire a superstar for your business; what a grind you have in front of you. Introducing Promotive, a full-service staffing solution for your shop. Promotive has over 40 years of recruiting and automotive experience. If you need qualified technicians and service advisors and want to offload the heavy lifting, visit https://gopromotive.com/

Thanks to our Partner WickedFile

Turn chaos into clarity with WickedFile, the AI for auto repair shops. Transform invoices into insights, protect cash flow, and stop losing parts, cores, or credits to maximize your bottom line. visit https://info.wickedfile.com/

Paar Melis and Associates – Accountants Specializing in Automotive Repair

Visit us Online: www.paarmelis.com

Email Hunt: podcast@paarmelis.com

Text Paar Melis @ 301-307-5413

Download a Copy of My Books Here:

Wrenches to Write-Offs
Your Perfect Shop

The Automotive Repair Podcast Network: https://automotiverepairpodcastnetwork.com/

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The Tax Mistakes That Get Auto Shops in Trouble (and How to Avoid Them) [E207]