Barter Is Not An IRS Target!

Perhaps the most entrenched myth about barter—one that many CPAs themselves perpetuate out of lack of current information—is that it flags a company for an IRS audit.

Source of the myth: Between 1979 and 1983, the IRS put considerable resources into a project to examine the barter business. During that period, all trade exchange networks were audited, along with a sample of their clients’ returns. The study disclosed that businesses that used barter had a better than average record of tax compliance.

Today, a company that barters has the same chance of being audited as any other organization.