Tax Law Tips: Being Prepared for an Audit

 Posted on April 29, 2016 in Tax Audits

Four words that strike fear into the hearts of individuals and businesses alike are: "You are being audited." The thought of an audit raises images of being grilled by the auditor like a witness being cross-examined.

However, an audit doesn't have to be like that, and if you are prepared for it, you can help ensure that the process is completed with a minimum amount of time and trouble. Here are some tips to assist you in the event that the IRS or a state revenue agency selects you for an audit.

1. Keep good records.

Many people-and even many small businesses-tend to get so caught up in the hustle and bustle of everyday life that they neglect to maintain solid records showing legitimate business expenses. The idea of managing and filing mountains of receipts, invoices, and other similar documents can be daunting, but if you start today and keep on top of this regularly you can avoid the hassle of going through shoeboxes of receipts trying to show the auditor what is-and is not-relevant to your bottom line .

2. Communicate.

Too many people receive a notice of an audit and spend the next several weeks avoiding all contact with the auditor. The process will be easier to navigate if you keep open your lines of communication.

3. Consult a good attorney.

If the amount of money at issue is significant you should bring in a tax law expert . This will likely prove to be well worth the expense, and you won't have to try to handle the audit on your own.

Contact us if you have any questions or would like to set an appointment to discuss your situation.