This article was originally published in 2017. Some rules, rates or tools mentioned may have changed since — contact us for current guidance.
Most of us breathe a sigh of relief after completing our taxes, knowing that they're done for another year. But for a few businesses and individuals, the tax season continues with an IRS audit. If your business receives an audit notice, it means the IRS wants to review some of your claimed income and deductions to confirm your tax return is correct. But what do you do if you get an audit notice?
Here are four steps to take:
Stay Calm - Most of the time, IRS audits are completely random, and the IRS is very reasonable and willing to work with honest citizens. Save your correspondence with the IRS, and follow instructions and timelines you get from them.
Gather Evidence - If the IRS needs to see documentation to prove your return, set aside time to find it. Now is the time to gather all those receipts, invoices, and contracts that prove you did what you said on your return.
Get Help - Audits can get complicated, and they're easier with the support of your accountant or an audit protection service. If you used someone to help prepare your return, get back in touch with them and ask for assistance. Good audit support dramatically decreases your workload and stress levels.
Pay Assessed Fees on Time - If the IRS determines you owe them additional money based on the audits, pay the money by the deadline to avoid additional penalties or other consequences. If you need more time to pay the bill, contact the IRS and work out a payment plan.
One of the best protections being assessed penalty fees when you're audited is keeping perfect financial records. Outsourcing these tasks to an experienced financial services company dramatically reduces your risk of errors. Contact us for help with your books throughout the year.
