Running a business is complex at the best of times. One of the major issues that you have to worry about is taxation. It’s your responsibility to make sure that your taxes are always paid in full.
Each year, it’s typical to work with an accountant or attorney to go over tax-related problems and to come up with good strategies for minimizing taxes. Unfortunately, if the Internal Revenue Service wants to audit your business, you may have a bigger struggle on your hands if there are any errors.
What happens during an audit?
During an audit, the IRS’s goal is to look through specific financial records to verify their accuracy. Audits may look at things like your accounting books or financial statements to make sure that you are reporting your income as you should.
IRS audits may be triggered for many reasons such as a discrepancy on your small business tax return. Sometimes, the IRS randomly performs audits as well.
If you’re going to be audited, you’ll receive a notification by mail. The entire audit may be done through the mail or in person, depending on the specifics of your case.
Plan for an audit
It’s important for you to plan for audits as a business owner. You should keep all of your business and tax records organized, so that it is easy for you to provide the Internal Revenue Service with the information that it wants if it intends to audit you.
It’s imperative that you do not try to face the IRS on your own. People who do this may make mistakes such as giving the IRS too much information or accidentally admitting to wrongdoing that they don’t realize is serious. It’s better to have a good understanding of your legal rights and obligations before you discuss any part of your audit with the IRS agent who works with you.
If you’re going to have an audit by the IRS or want to prepare for one, it’s smart to look over your legal rights and obligations. Being prepared can help you minimize the risks during an audit and protect your business.