Small business owners often live in fear of the day they get audited. They make smart business decisions, following the rules and doing what they can to keep from triggering one. But sometimes, despite all that, the dreaded letter arrives from the IRS.
Getting Audited Doesn’t Mean You Did Something Wrong
Many people assume they’re being audited because they did something wrong on their taxes. This isn’t necessarily the case. While there are trigger factors that make an audit more likely, the IRS also pulls random tax returns for audits. It’s like being called for jury duty. Sometimes it’s just your turn.
Having your financial records audited by the IRS takes time away from running the business. If you’re being audited, there are a few steps you can take to get through the process in as little time as possible.
Follow These Tips for Surviving an Audit
Here are a few tips for surviving an audit from the professionals at Adams Accounting Solutions. Follow these, and you’ll soon be moving forward again with your full attention on meeting your business goals.
Tip #1. Notify your accountant as soon as you receive the audit letter from the IRS. This gives them plenty of time to pull your tax returns and get them organized for the audit team. Many accountants go through the audit with their clients, answering questions about how the tax returns were prepared and pointing auditors to supporting documentation. This is a big help for those being audited for the first time.
Tip #2. Gather all your tax documents together as soon as possible. Don’t wait until the day before the audit to start this task, and don’t miss any deadlines. If a document is missing, you need to know sooner rather than later, so you can find it before the auditor arrives.
Tip #3. Be professional. When the auditor shows up, be professional and courteous. Try not to get defensive when they ask questions. Remember that this isn’t personal; they’re just doing their job. The more you cooperate, the more smoothly the audit will go, and the sooner it will be over.
Tip #4. Stay calm. Many people talk too much when they get nervous. Auditors are trained to listen well and watch body language. Stay calm and answer questions fully but briefly. Don’t muddy the water with information they don’t ask for. It may end up extending the audit.
Tip #5. Don’t lie about anything. This may seem like a no-brainer, but people do strange things under pressure. Remain calm so that you can think clearly. Answer every question as honestly as you can.
Tip #6. Don’t file or amend any returns during the process. Continuing to file extensions or amend returns during the audit process will only give the auditors more to comb through. Save all that until the audit is complete.
Adams Accounting Solutions Is Here For You
At Adams Accounting Solutions, we like to think of ourselves as partners with our clients. When we prepare tax returns, we stand behind our work. If our clients get audited, we go through the process with them, helping them pull the required documents together, meeting the auditors, and guiding them through the process.
If you’re looking for an accounting firm that goes above and beyond for its clients, call Adams Accounting Solutions today!
Richard Adams is a graduate of Benedictine College in Atchison, Kansas, with dual majors in Accounting and Business Administration. He is also a graduate of Wentworth Military Academy in Lexington, Missouri.