Action Plan: What to Do If the IRS Audits Your Business
It’s the news that that most tax payers dread: receiving notification from the IRS that your company is the subject of an audit. What do you do? Panic? Prepare? Seek professional tax help? We have developed an action plan to follow if you receive an audit notice.
1. Do Not Panic: Take a deep breath and realize that audits do not automatically mean devastation to your business. Often times, you may be able to answer the IRS’s question in writing without an in-person audit meeting. You may be able to solve this fairly painlessly.
2. Make Sure You Understand What is Being Asked: Spend time thoroughly reviewing the notice you received from the IRS to be sure that you understand exactly what they are looking for and when they expect a response. You can call the IRS if you have questions about what is being asked.
3. Respond Promptly: An audit notice is not something to toss away or ignore. Make sure that you are prepared to respond to the notice from the IRS in the timeframe that they outline. Ignoring or failing to respond on time will just escalate the situation.
4. Prepare for the Audit: Perhaps the most important thing that you can do to prepare for an audit is to do your homework. Find all background documents that are related to the tax return in question. This may be receipts, checks, and income information. The IRS can and will ask to see any of this information. Make sure that your information is pulled together in an organized fashion so that it is easy to look through. Strong organization and neatness may help you gain a bit of credibility with the auditor. Review this information thoroughly before the audit so that you feel confident managing any questions that may come up.
5. Know What May Be of Interest to the IRS: The IRS will be particularly interested in seeing backup documentation related to travel and entertainment records, automobile records, and information related to certain equipment used for both personal and professional purposes, like computers and cell phones.
6. Determine If You Need Audit Support: It may be wise to seek help from a tax professional for the audit, particularly if the audit is not solved in writing and a meeting is scheduled. Make this decision as early on in the process as possible to give the tax firm ample time to review your documentation and provide strong audit support.
Success Tax Relief: Strong Audit Support for Individuals and Businesses
Audits do not have be scary or intimidating. With some hard work and preparation, it can be handled and put behind you once and for all. Success Tax Relief has been providing audit support for individuals and businesses for more than 30 years. Our team can begin working with you immediately. We can help you determine exactly what the IRS is looking for and the best possible way to respond. Success Tax Relief can also help you during the actual audit process. Give us a call today at 1-877-825-1179 and take away the stress of dealing with an audit.