IRS Audits & Self-Directed IRAs: What Every Investor Should Know

Ever wondered what could trigger an IRS audit on your self-directed IRA? In this episode of The Preferred Way, CEO Carrie Cook and Client Service Agent, Alysia Ball pull back the curtain on IRS red flags, prohibited transactions, and the critical importance of accurate recordkeeping.

Learn how to:

Avoid prohibited transactions that could disqualify your IRA
Identify warning signs when choosing a custodian
Maintain compliant records that protect your retirement savings
Understand your role vs. your custodian’s role in due diligence

At Preferred Trust Company, transparency isn’t just a promise — it’s a policy. Discover what makes a truly qualified custodian and how to protect your retirement funds the preferred way.

📈 Ready to invest with confidence?
👉 Open an account today at PreferredTrustCompany.com

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YouTube Timestamps
00:00 – Introduction
00:38 – What Triggers an IRS Audit
02:16 – Prohibited Transactions Explained
04:18 – High-Risk & Unusual Investments
05:38 – Custodian vs. Investor Responsibility
07:12 – Proper Titling & Asset Verification
08:03 – When Borrowers Raise Red Flags
09:22 – Shady Operating Agreements & Due Diligence
10:42 – Custodian Liability & Legal Exposure
11:02 – Mixing Personal and IRA Funds
12:22 – Ownership Percentages & Tracking
13:37 – Licensing & Regulatory Oversight
15:10 – Employee Training & Custodian Mistakes
16:45 – Response Times & Service Red Flags
18:17 – Checkbook LLCs Under Scrutiny
20:09 – Acting as Your Own Custodian
22:22 – The Need for Accurate Recordkeeping
23:13 – Why Some Choose IRA LLCs
24:11 – How Preferred Trust Handles Documentation
25:00 – Closing. Part 2 Coming Soon

Disclaimer 2025 Preferred Trust. Preferred Trust performs duties of a custodian and as such, does not sell investments or provide investment, tax, or legal advice. Preferred Trust is committed to safeguarding all non-public personal information provided to us by our customers. Preferred Trust collects, retains, and uses customer information where we reasonably believe that it will help administer our business or provide services to our customers. We collect and retain customer information only for specific business purposes and upon request will inform customers why we are collecting and retaining the information. PREFERRED TRUST, LLC “Preferred Trust” 6700 Via Austi Parkway, Suite 301, Las Vegas, NV 89119 702.990.7892 888.990.7892 Financial Institutions Division of Nevada License No. TR10025.