What Happens in an Audit

What Happens if Your Company is Audited?

The mention of an audit strikes fear in the hearts of small business owners, even if they are proactive to be compliant with the laws and regulations. As a business owner, there is no reason to worry about an audit if you have the right team of bookkeepers and accountants in place to help.

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Do you know what is involved with an audit? Most small business owners don’t know a lot about the auditing process, which means that they fear the unknown. Here is a little information to educate you about potential audits that might occur:

Potential Types of Audits

Being audited doesn’t necessarily mean that someone from the IRS will be knocking on your door. There are several types of audits that can occur, and your accounting team can help with all of these scenarios. Potential audits might include:

  • Mail Audit: If the IRS needs more details about your tax return, then they might send a letter in the mail requesting specific documentation.
  • Correspondence Audit: This type is similar to a mail audit, except the communication could happen through an electronic channel of communication. Typically, a correspondence audit happens when the IRS is collecting unpaid taxes or needs supporting documentation to back up claims made on the business tax filing.
  • Field Audit: The type of audit that has given the name a bad reputation. In this situation, an IRS employee will come in person to view your business records.
  • Examination/Interview Audit: In this situation, you might be asked to visit the IRS office to provide documentation or receipts to back up claims.

Just because an audit is happening, doesn’t mean that your stress levels need to go through the roof. You can relax if you know that your records are in order. The best way to stay on top of the financial tracking required to protect you in an audit is to have a professional accountant helping with your business management.

Accounting Services to Prevent an Audit

Instead of waiting for an audit to happen, there are a few things that you can do to reduce the likelihood of an audit. An experienced accountant will be able to offer specific recommendations catered to your personal situation. So, it is important that you have an experienced accounting team by your side throughout the year.

At Easier Accounting, we are experienced with small business accounting. If you are interested in more information, then you are invited to contact us right away: (888) 620-0770

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