As tax time approaches, your attention inevitably may turn to your risk of being audited. In fact, as a small business owner you could have reason to worry when you consider the small, yet still formidable number of small businesses chosen by the IRS for this dubious recognition each year.
When you take into consideration the relatively small percentage of businesses audited by the IRS each year, you may think that you are particularly unlucky when the IRS singles out your small business for this purpose. While going through an audit understandably can be nerve wracking and downright inconvenient, you still have a number of resources available to you to make this process smoother and less worrisome. If or when the IRS zeroes in your small business returns, you can use these strategies to beat an audit.
You may pride yourself on being able to run a small business that provides quality services and products. For all of your success, however, you may be unaware that your tax returns could prompt the IRS to audit your company. In fact, many small business owners like you want to do everything in their power to avoid being audited. You can lower your own risk and continue to enjoy all of the success of running your own business by understanding some of the primary details that the IRS looks for when choosing whom to audit each year.
Many people consider an IRS tax audit to be among their worst nightmares. Even as they make nervous jokes about being audited, people understand the grave legal and financial consequences that can come from being quizzed about their prior years' returns. However, you may be surprised to learn that the IRS does not always have the advantage when it comes to your audit. In fact, this organization routinely asks people to grant it an extension. You may at first be tempted to refuse this request. However, before you turn down their offer, you should consider some of the key reasons for granting the IRS an extension on your audit.
If you're facing the prospect of an IRS audit, you may be tempted to go through the process alone. However, enlisting professional audit representation is an excellent way to reduce the stress of an audit and avoid unnecessary taxes. Here are five reasons to have audit representation.
An IRS audit reconsideration is a review that the IRS grants to taxpayers who have already completed an audit. The reconsideration is basically a re-examination of the case to look for errors that may have been committed while assessing the individual's tax liability. There are only a few situations in which the IRS will consider re-examining the results of a completed audit. As a result, it's important for taxpayers to know which circumstances qualify for reconsideration and how they can begin the process of requesting the review.
Receiving a written notice from the IRS may trigger feelings of fear or concern. Receiving an IRS audit letter in particular can be a scary experience. What's in an IRS audit letter? Can you do anything about an impending audit? What should you do if you disagree with the findings in an audit letter?
If you find out that you have been selected for an IRS examination, you may easily become nervous about what to expect. An IRS examination, commonly referred to as an audit, is a detailed review of your financial situation. In most cases, the agency will only discuss specific matters that relate to a certain tax year. Do you know what exactly happens at an IRS examination? Do you need to do anything to prepare for it?
The words "IRS audit" may be downright frightening to the average taxpayer. News reports of taxpayers who've had to pay back thousands or even millions of tax dollars doesn't do much to ease that fear. Since taxpayers are often afraid of audits, they may avoid learning the truth about the IRS audit process. Here are a few common audit misconceptions that can ensnare taxpayers.
As the filing deadline draws closer, many taxpayers realize that they won't be able to submit their returns on time. These individuals often turn to filing a tax extension to have more time to prepare their forms. Is this a wise thing to do? Does filing a tax extension make it more likely that the IRS will audit you?
