The IRS auditing your business might seem like a death sentence for your company. However, when you know what to expect from an audit, you can relax and prepare for it. Take a look at our quick guide to understanding what to expect from an official review.
First, the IRS will go over all the records you can provide them. They’ll look for anything you might have missed in the fine print. If you have made errors, the auditor will ask you to explain any discrepancies. It is all right to admit that mistakes were made. Honesty is a much better policy than trying to cover up your errors. Consider how to avoid these mistakes in the future.
The auditor will ask you a lot of questions. They might even seem too personal, but you have a duty to answer all questions honestly. You may not understand how your personal life relates to your business’s income or expenses, but the questions all have meaning. For example, an auditor may be interested in ruling out the possibility of you siphoning money from your company for your personal needs. This would be a valid reason for questioning your personal life.
The auditor will look into the duties of your employees and contractors. This is to see if you’re using any of these people as a cover for hiding money. You might get offended at these accusations, but the auditor must be thorough with reliable businesses to weed out those that are breaking the law. Keep a clear head, remain calm and honest, and the audit will be finished before you realize.
Contact Armen Derderian today for help with your taxes. We’ll make sure you avoid an audit and get your taxes filed on time. Don’t wait until the last minute—call us now!