IRS business tax disputes encompass audits of business income, deductions, employment taxes, worker classification, and entity-level issues — and the stakes are often higher than individual disputes because they can trigger personal liability for business owners through the Trust Fund Recovery Penalty. Common IRS targets include worker classification (1099 vs. W-2), payroll tax compliance, business income reconstruction, and deduction substantiation. Neil Jesani Tax Resolution's team includes former IRS Large Business and International division auditors who understand exactly how the IRS builds business cases. Key Takeaways IRS business audits are increasing, with the agency targeting specific industries and red-flag deductions more aggressively than ever Business owners can face personal liability for unpaid business taxes , including the Trust Fund Recovery Penalty Partnership audits under the BBA follow unique rules that can result in entity-level assessments affecting all partners Worker classification disputes between 1099 and W-2 status are among the most common and costly IRS business audit issues Professional IRS audit defense is critical for protecting both the business and the business owner's personal assets Why IRS Business Audits Are Increasing The IRS has significantly increased its focus on business tax compliance in recent years, driven by Congressional funding through the Inflation Reduction Act and a growing recognition that the business tax gap represents billions of dollars in uncollected revenue. The IRS Large Business and International (LB&I) division and the Small Business/Self-Employed (SB/SE) division have both expanded their audit programs, deploying more revenue agents and implementing new data analytics tools to identify non-compliant businesses more effectively. According to IRS data, certain categories of business returns face substantially higher audit rates than individual returns. Large corporations with assets over $250 million face audit rates exceeding 10%, while S corporations, partnerships, and sole proprietorships with high gross receipts see elevated examination rates as well....