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BizReport : Research archives : April 12, 2017

Top tips to survive an audit

Audits are scary things, especially for small businesses. But, getting that notice from the IRS doesn't have to be the end of the world - or the end of a business. One expert offers advice on how small businesses can survive an audit.

by Kristina Knight

Understand your rights during the audit

"The IRS is required to tell you why your return was audited, it's your responsibility to ask," said Charley Moore, CEO, Rocket Lawyer. "[You have] a right to privacy and confidentiality about tax matters, a right to know why the IRS is asking for information, how the IRS will use it and what will happen if the requested information is not provided, a right to be represented, as well as a right to appeal disagreements, both within the IRS and before the courts."

Understand what Records are Needed

"You will be provided a written request for specific documents, so once you receive notice you should start going through your records to find the relevant receipts and documents. Good organization shows the agent that you are a responsible taxpayer and may result in the agent limiting the scope of their investigation," said Moore.

Understand that an audit can result in changes

"[These changes may include] additional taxes, interest and possibly penalties can be imposed at the conclusion of the audit. Consult with your accountant or tax attorney on how to handle," said Moore. "If you are still nervous about the audit after completing [these] steps, it's a good idea to hire a professional tax lawyer."

Tags: Rocket Lawyer, SMB audit tips, SMB tax tips, tax tips

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