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IRS business audits coming: 5 ways to get prepared

According to reports, companies in Georgia and elsewhere could be audited by the Internal Revenue Service in the years ahead. Because of the lack of government funding, the agency has been restructuring itself and strategizing new ways to return to tough audits. Instead of continuous tax audits it used to perform in the past, the IRS is planning audit campaigns that will focus more on specific tax issues instead of specific taxpayers. Th`ere are several ways taxpayers can be prepared if they are audited.

In the first place, taxpayers should realize that when the IRS performs an audit, they can use any of the taxpayers' data and documents against them. Therefore, business owners should always take precautions when documenting transactions and preserving data and documents. Only certain trusted individuals should be privy to relevant information.

Further, taxpayers should be aware that, because of the privilege claim, the IRS can issue summonses to acquire documents, even documents that contain private information. This action has landed many taxpayers in court. The IRS is also conducting informal interviews of taxpayers and their employees as part of the audit process. Consequently, taxpayers should take these interviews seriously and prepare ahead of time for them because anything stated could be used as evidence against them.

Whenever an IRS audit is conducted, the IRS examiner usually does a thorough search of the taxpayer's records. It can be easy for taxpayers to miss one small error, which could put them in jeopardy with the IRS. Therefore, a taxpayer who receives a tax audit notice from the IRS might consider contacting an experienced attorney who could appear at the audit on the taxpayer's behalf.

Source: Forbes, "IRS Waging New Audit Campaigns Against Business Taxpayers", Janet Novack, July 7, 2016

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