Are you unfortunately facing a tax audit? In a tax audit against a business or individual, the IRS is making sure that you properly reported all of your earnings and are actually entitled to what you claimed on your returns.
A tax audit can be nerve wracking, especially if you arrive unprepared, so here’s how to handle one professionally:
1. Understand your rights.
When going into a tax audit it’s important to understand the Taxpayers’ Bill of Rights beforehand. This way if you are treated unfairly or are accused of fraud during the audit, you can understand how to handle it and what rights you can exercise.
2. Understand the current tax laws.
Besides knowing your rights, it’s important to understand the current tax laws. If you feel lost, make sure to consult a tax or financial expert who can help you understand what you’ll be getting into during a tax audit.
3. Gather all necessary documents.
Receipts, business expense records, and other important documents should be with you during your tax audit. Make sure that if you are missing receipts or other documents, you are allowed to reconstruct records.
4. Accept that you’ll owe money.
Unfortunately, if you’re being audited it’s most likely because you owe tax money to the IRS. You won’t be able to fight the auditor about how much you owe, but you can question the tax problems marked against you.
5. Be patient.
While going into a tax audit can be a stressful experience, you have to be patient for the outcome. The IRS has up to three years to complete an audit against a business or individual, so the process can take a while to resolve.
6. Remember that you can file for an appeal.
When the final verdict of your tax audit is reached and you don’t understand or agree with it, call the auditor and see if you can reach some sort of agreement. In a worse case scenario you can also appeal within the IRS or go to tax court.
Besides having your taxes filed correctly, it’s also important that your business has the right coverage. To make sure you’re properly covered in any type of incident, click the button below.