Planning and Accounting for Tax Audits

An audit of taxes is seldom a positive experience. No matter how small or large the audit is, it can be frustrating.

The audit will be made known to your company. In order to help you build the documents, we will inform you which part or sections of your tax returns will go under scrutiny. The next step is to choose who will represent your interests. It is a good idea to seek the advice of an expert in tax law. If you don’t have the funds to hire a professional, or if you have any problems with the audit in general, you can request that the audit be suspended. This will allow you consult with a tax lawyer, more info certified public accountant or until you are properly accompanied. It is costly to hire a professional, but it will ensure that the audit is done correctly and saves you time and stress.

You will need all supporting documents to be able examine the information for the key areas you have reported in your taxes. The review will start with income, bank statements, deposit records and other financial records. The review will include sales records as well as other accounting records. It is important to record any gifts or inheritances. If they don’t, these might be considered taxable income by IRS.

You will need to carefully examine the accounting records for your business’s financial indebtedness. The tax return can be compared with receipts, bank and card statements, checks, as well other records. It is important to pay attention to the following: business losses, debts, charitable contributions. You must have accurate records to prove that the expenses were authorized.

Bank statements are required to show that money borrowed for business purposes was not used as an interest.

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