As a business owner, few things are more concerning than a notice of audit. When the IRS lets you know that you’re going to be subjected to an audit, they’re going to be taking a closer look at your business tax return, specifically your profit and loss and what deductions you claimed for the year. The audit could be as simple as providing the IRS for a few business receipts to verify your deductions, or it could be a long, drawn-out process where the IRS leaves no stone unturned. If you’ve been notified of a business tax audit, it’s critical that you be proactive and contact a tax defense attorney for representation.
Business Tax Audits Are Usually Done In Person
While many individual tax audits can be done via mail, most business audits are actually conducted in person. This can be nerve-wracking, but it can go smoothly if you’re well prepared. These are called field audits, and they are usually much more comprehensive than a correspondence or desk audit. Generally speaking, if an IRS agent is going to take the time and make the effort to come to your place of business, they’re going to take a look at everything. You should understand going into the audit that the result may potentially work in your favor and you may end up paying fewer taxes — but the other possibility is that you could pay more. Know that the auditor’s decision is not necessarily final and that you do have the right to appeal should you wish to do so.
The smartest thing to do when you’ve been notified of a business tax audit is to start putting together documentation. Get records out of storage and print copies of everything related to your taxes for the year or years in question. Then, separate the documents into two sets– one should be informed that the auditor requested specifically. Ideally, this is the only information you’ll have to go over during the audit. However, if the auditor has additional questions, you’ll want the rest of the information related to that year on hand so you can respond quickly. The audit notice may also indicate what questions the auditor plans on asking during the audit. It’s best to prepare answers to those questions and go over how you’ll present the information being requested. Not only does this help make the encounter smoother and more professional, but it can also help you feel less nervous and ready to tackle to audit.
Hire a Tax Defense Attorney
While it’s sometimes possible to handle a correspondence audit on an individual tax return without representation, it’s not something you want to take a chance on when your business is being audited by the IRS in person. You need a tax defense lawyer who understands the business audit process and can help you get together everything you need to present a solid case. Hiring an attorney doesn’t mean you have something to hide — it simply means you’re protecting your interests much like the IRS is protecting theirs.
Contact Tribute Tax Defense today by filling out our online form or calling (713) 497-1841 for a free consultation.