Into large bowl, add 1 1/2 cups flour.
Add 1 cup sugar, buttermilk, eggs, shorting, baking powder, baking soda, salt and nutmeg. Beat with a mixer at low speed, just until smooth, constantly scraping bowl.
Then at medium speed, beat 1 minute, constantly scraping bowl.
Add in remaining flour. Beat gently to make soft dough.
Cover and place in refrigerator for at least 1 hour, to make dough easier to handle.
Flour a large work surface and rolling pin.
Roll dough out to 1/2-inch thick.
Using small biscuit cutter, cut all dough into small circles.
Reroll and cut trimmings until all dough is used.
Pour oil into a deep fryer to a depth of about 3 to 4 inches.
Heat oil to vegetable oil to 350°F as measured by a candy thermometer.
When oil is hot, gently place 10 or 12 dough balls at a time into oil. Do not crowd.
Turn with a pancake turner as they rise to surface. Then turn often until golden brown.
Lift doughnut holes from oil with slotted spoon. Place on a paper towel-covered plate to drain.
Repeat until all doughnut holes are fried.
Serve as is or sprinkle with confectioners' sugar or Nutmeg Sugar while still warm.