Is your Small Business Prepared for an Unexpected IRS Audit?

Man writing at desk - article TIPS FOR FIRST TIME HOME BUYERS

Small business owners have a lot to deal with. You have to take care of every business aspect while making sure that you are providing top-notch services or products for your customers. Managing a small business is not an easy thing to do. When the burden of keeping your business prepared for an unexpected IRS audit falls on your shoulders along with the hectic schedule of running a small business, things could get tricky for you.

However, lucky for you, there are tax firms like Top Tax Defenders available to help you with your tax problems. A tax firm can not only prepare your small business for IRS audits but also get you out of them.

Steps to Take When Preparing for a Small Business IRS Audit

The first thing we strongly recommend is you solicit help from an experienced tax attorney or a tax firm when you have begun preparing for a small business audit. You will find teams of professionals that have years of dealing with the IRS under their belts. The team consists of attorneys who are well-equipped to handle any obstacles you might run into with the IRS.

Nonetheless, there are precautionary steps you can take to prevent your small business from getting into too much trouble.

1.     Review Your Financial Accounts Regularly

It is vital to keep good track of your finances since it is necessary to have up-to-date information regarding your small business. As a matter of fact, your small business will be safe from an audit from the IRS (after filing your taxes) if you continue to follow approved accounting practices throughout the year. Furthermore, the less time you spend adjusting your books and looking for mistakes, the more you will gain to make the daily operations of your business the centre of your attention.

2.     Anticipate Their Questions

As tough as it is to believe, the IRS does not like or wish to comb through every single detail of your finances any more than you want to. In most cases, small businesses are flagged for an audit due to some particular issue – or a set of issues. And, you will see that most of the questions will focus on that area. So, by thoroughly reviewing your financial accounts regularly, you might be able to discover a potential area of interest. Additionally, if you cooperate with the IRS, they might even ease the suspicion of fraud and expedite the entire audit process.

3.     Gather All the Paperwork the IRS Needs

You should collect all of the required financial paperwork. The IRS will immediately send over a list of documents they need from you. Therefore, it is essential to provide these documents to them before any deadlines are imposed.

List of Documents You Need

  • Receipts and Bank Statements
  • E-Transaction Records
  • Books, Journals and more
  • Book of Appointment Logs (If you are in the business of services like a nail salon or a masseuse, then you will need to provide a log or a calendar to prove the existence of the clients and the amounts you charge)
  • Record of Equipment
  • Vehicular Records
  • Travel or Entertainment Records

Bottom Line

Needless to say, figuring out the troubles of an audit is tough to do if you do not have any experience with it before. Therefore, if you ever encounter the intimidating possibility of having your small business audited by the IRS, then do not waste any time. Instead, contacting an expert at Top Tax Defenders to help with your tax problems will make all the difference.

Interesting Related Article: “IRS: Everything You Need To Know