Receiving an audit notification from the IRS can be frightening. Each year, the IRS randomly selects people to audit. Whether you’re a business owner or an individual taxpayer, the IRS may select your tax return. There is nothing pleasant about an audit, but there are ways to survive. If you are a business owner and the IRS selected your return, follow these three tips.
1. Don’t panic. While an IRS audit may result in paying additional tax money to the government, the damage may not be that bad – especially if you already made a tax payment. The IRS may have questions about a few of your deductions or donations. In cases of ineligible deductions, you’ll have to pay taxes on this money, plus a penalty on the underpayment. Stay calm. The ability to think clearly will help you get through this experience.
2. Look for your accounting and tax records. Gather financial documents to support the tax return in question. It’s possible to beat an IRS audit, but only if you keep accurate records. Having a qualified Burbank accountant by your side will alleviate pressure and potential expense.
3. Hire a Burbank CPA. Don’t go to an IRS audit alone. Hire an experienced CPA and ask this person to represent you during the audit. This professional can break down IRS letters in layman’s terms, help sort through your financial documents and develop a plan of action. With a expert CPA in Burbank helping you in times like these, you’ll have someone who understands tax laws on your side.