Just today, one of our clients received a full audit notice. It doesn’t happen often, but be prepared! In this case, the audit may have been triggered by large prop firm trading losses. Everything we have reviewed so far appears legitimate—but that doesn’t make an audit fun.

Large losses, unusual deductions, or anything else that makes a return stand out can potentially draw additional scrutiny. That doesn’t necessarily mean there is anything wrong with the return, but it does mean sound strategy, good records and documentation matter. When claiming significant trading-related losses or deductions, make sure you can clearly support where the numbers came from.

The goal isn’t to be afraid of an audit. It’s to be prepared if one does come. Let us help you prepare.