The following problems cannot be considered garden variety and will require a thoughtful approach:
1. Receipt of a subpoena or summons for your tax information or the tax information of a third person, such as a customer, client, or "independent contractor" when your relationship with them involves barter, exchanges for less than "market" value, or substantial cash payments;
2. receiving an audit notice, including a compter notice, when:
a. your returns are not completely correct;
b. your business activity or occupation is not traditional (street performer, bar hostess, etc.);
c. you do not have the appropriate license for your activity (for example, an unlicensed building contractor or sub-contractor);
d. you are operating your Hawaii business, Hawaii rental unit, or Hawaii vacation rental without a General Excise Tax or, if applicable, Transient Accommodations Tax license;
e. you have a financial connection with someone that meets any of the criteria on this list that will likely be exposed to the tax authorities during the audit.
3. receiving a (non-computerized) contact from the tax authorities when you have had significant tax problems, possibly including criminal tax problems, previously;
4. having unpaid taxes or a tax lien filed when your employment requires a security clearance or will subject you to media scrutiny;
5. you receive a significant portion of your gross receipts in cash and/or pay a significant portion of your expenses, especially labor, in cash;
6. you have not issued 1099s despite being required to do so;
7. you have bank or financial accounts located outside the United States (aka "offshore accounts,") and/or you own a business outside the United States, that have not been disclosed to the Treasury Department or reflected on your income tax returns;
8. you have "independent contractors" working for your business that many in your industry treat as "employees."