Business Tax Audits

A business tax audit can happen at any time. You may be under the impression that your taxes are filed properly and the business tax audit notice comes completely unexpectedly. Or you may be uncertain about your business taxes, or someone you worked with may have filed your taxes incorrectly. Whatever the case, we can help you defend your business against an audit, and get back on the right track if adjustments are needed.

How Do I Know If I Have Been Audited?

If you are subject to a business tax audit, you will receive a notice in the mail. If you see letters addressed to your business from the IRS, you should open these immediately and read them carefully. These notices will give you more details about your business tax audit. Keep in mind that the IRS will never call you or send you an email. If you receive a call or email from someone claiming to be the IRS, it is, most likely, a scam. Do not respond to these messages. If you are concerned, contact the IRS directly or contact a tax expert.

I Received a Business Tax Audit Notice. Now What?

The letter you receive will give you more information about your business tax audit. It is important to remember than receiving an audit notice does not necessarily mean your taxes are incorrect, or that you owe money to the IRS. There are many different types of business tax audits and notices, and many of these are automated. Notices are not always accurate and you should work with a tax attorney or tax accountant to make sure you don’t pay more than you should.

Your notice will explain which type of business tax audit the IRS will pursue. Regardless of the type of audit you receive, you should speak with a tax professional. If you received an audit because of an error made by the IRS, a tax accountant will help you organize your documents and show that your taxes were filed correctly. If you were audited and your returns were not accurate, an expert can help you reduce your tax debt, or make a payment plan that works best for you. If your taxes are correct but the IRS has not accepted the proof you’ve provided, it’s time to work with a tax attorney to defend your business. With professional audit assistance, you can resolve the audit with no damage to your business. 

What Happens In a Business Tax Audit?

There are four types of business tax audits, and each is unique. Some can be dealt with quickly and easily, others are more difficult. In some situations, it is possible to resolve your tax audit without ever meeting with or speaking with an IRS agent. What happens after an audit notice will depend on the type of audit you receive.

Office Audit

If an office audit is required, it means a few documents won’t resolve the audit, and the IRS has additional questions that can’t be answered through mail. In this case, you will have to visit a local IRS office. At this stage, you should work with a tax professional to ensure your documents are in order. With proper documentation, an office audit can be resolved in just one day. However, if you cannot locate the documents you need, or the IRS has questions you’re not sure of, a more extensive audit may be required.

Field Audit

In this type of audit, the IRS will visit your business. In this case, the IRS has a variety of questions about your return and your business. Since this type of audit requires more time and resources than other types of audits, the IRS generally only uses it when the mistakes are adjustments needed are severe. In a field audit, the IRS may ask about any area of your business. In this case, you should always seek professional tax assistance, including a tax accountant and tax attorney.

Correspondence Audit 

In this type of audit, the IRS requests additional documents that were either not included in your return, or may have been lost. A part of your return may have been unclear, and the IRS needs additional proof to make sure it is correct. If a correspondence audit is resolved properly, you can stop the situation right away and resolve the audit. If you find documents that show your taxes were filed incorrectly, it’s best to contact a tax professional before proceeding. Additional fines and penalties may be applied if your taxes were filed incorrectly.

Randomly Selected Audit

 The last type of business tax audit is not actually determined by your tax return. The IRS conducts a large group of random business tax audits to support statistical accuracy. Though these are randomly selected, they are still very thorough. Every line of your tax audit will be assessed, and you will be asked to provide proof for every number. If you are selected for this audit, you should work with a tax professional.

Do I Need Audit Assistance?

In some cases, the audit can be resolved with just a few letters. In other cases, what started as a correspondence audit can turn into a large-scale field audit. We know that business tax audits can be confusing and scary. That’s why we provide personalized audit assistance to each client, making sure they understand what the IRS needs to know, how to proceed, and what to expect. When you have experts working with you, you won’t be confused about the audit and you’ll known that your business’s taxes are in good hands. Contact us to learn more. 

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