Tax debt resolution specialists like Wall and Associates are busy year round. Clients need understanding and professional guidance about countless tax-related matters. One of the most pressing matters that requires a taxpayer’s attention is the infamous audit, or examination of a tax return.
Audits can seem like a terrible occurrence for those experiencing them. But with the right understanding, preparation and professional case planning, anyone can weather the storm.
As noted in a post from the BizFilings Business Owner’s Toolkit, “The IRS is attempting to increase revenue collection by closely scrutinizing individual tax returns that are most likely to contain errors. And, it defines those types of returns based on the Schedules filed to claim deductions. These targeted forms are the very ones most likely to be filed by a small business owner: Schedule A (Itemized Expenses), Schedule C (Business Expenses) and Schedule E (Supplemental Income).”
Whether or not you file one of these targeted forms, an audit can still come your way. But the big question remains: are you ready to handle the audit examination?
Making sense of the audit
Many people – particularly business owners – feel like they have done something wrong if they receive notice of an audit. Things that may increase your chances of an examination include owning or operating your own business, if you have many deductions, and earning a higher income. Being self-employed also increases your chances.
The IRS utilizes computer scanning technology to go over tax returns, and look for certain things. If your return causes a hit in the program, you could be audited.
Getting ready for an audit
The most important preparation tool for an audit is to have well-organized, itemized financial records that correspond to areas on tax returns. Documentation is essential when it comes to earned income, every claimed deduction on tax returns, plus expenses and other relevant records. An experienced consultant is crucial helping you organize your records before the examination.
IRS help when you need it
While an audit is not a very pleasant experience, the truth is with the right preparation and understanding of how the process works, an seasoned audit expert can make the experience easier and smoother for all parties involved.
The best advice to anyone facing an audit – no matter the state of their taxes or record-keeping – is to consult with a tax debt resolution expert. Ask them if they have years of experience fighting audits on behalf of taxpayers. This is especially true in situations where you’re left without a full understanding of your situation. But as the professionals at Wall and Associates reiterate, a consultation from experts specializing in audits and back tax resolution is always a recommended course of action.
This is not a solicitation for legal services.