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An IRS Business Audit Is No Place to Be Passive

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IRS audits are an intimidating and intrusive process that can result in a taxpayer or business owner paying additional taxes. This is why it’s never a good idea to handle an IRS audit without representation especially if your business is on the line. A recent article from CFO Magazine titled: “IRS Audits: Passivity Is the Worst Approach” warns businesses and executives to not be “passive” in an IRS audit. The article suggests that companies take a proactive and preemptive approach by making sure the tax professionals within the organization are qualified to handle an IRS business audit following the proper IRS protocols.

While the information in the article speaks about large company strategy, there is helpful information an individual or small business can use. The following are six key points the article mentions on how to prepare for an IRS audit:

  • Make sure the person handling the audit is knowledgeable about the administrative options and the tools available to effectively manage the examination process.
  • Failure to adequately and properly grasp the areas of focus from the initial IRS inquiry could lead to confusion and further inquiries from the IRS examiner.
  • The tax professional will want to work closely with the IRS examiner to guide his or her actions and keep the process focused.
  • Respond quickly to the first IRS audit notice. Responding to the second or third notice will have the business at a disadvantage and can negatively affect the focus of the examination. Did you know? Sometimes the best response to the IRS is no response at all? An IRS audit expert does.
  • A company will need to assess their documentation and record-keeping relating to the areas of review.
  • It is important to be engaged and proactive during an audit. Providing the examiner with thorough, complete, and accurate information will expedite the audit process.

The important message from this article is that businesses and individuals need to take IRS audits seriously from the moment they receive their first IRS audit notice. Also vitally important is making sure you hire a tax professional who not only knows how to properly respond to the IRS inquiry, but who also has experience with actual IRS audits.

If the IRS or your state income tax authority has sent you a letter of inquiry about your personal or business tax return, you will want to contact a qualified tax audit professional to represent you before the IRS. This tax pro will help you with the following:

  • Stand up for your rights and will make sure you are treated fairly.
  • Take over all communications with the IRS on your behalf
  • Send the proper documents to the IRS to support the item(s) on your tax return in question.
  • ​​Help you create a step-by step strategy for resolving your tax problem.

Contact Tax Audit Defense for help before or after an IRS tax audit at 800-410-2425 or email us at CustomerService@TaxAuditDefense.com.


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