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Preparation, evidence can help a business facing an audit

On Behalf of | Jul 6, 2021 | IRS Issues

Most Atlanta business owners know that paying taxes is part of the job. Of course, it is not unusual for the IRS to have questions about certain business taxes, and in some cases, an owner could end up facing an audit if the IRS suspects that something is amiss or if information is missing. Fortunately, there are ways for owners to help themselves prepare for this possibility and defend against those suspicions. 

Sales tax is one area that the IRS scrutinizes in relation to business taxes. If the agency suspects that an owner has not paid proper sales tax or has provided misleading information on tax forms relating to this type of tax, a notice of an audit could soon arrive. However, it is possible for the IRS to make mistakes, and even if an audit does take place, it does not necessarily mean that the business owner has done anything wrong. 

Some ways to help ensure that an owner has evidence to support their tax information include: 

  • Properly preparing sales records with accurate information 
  • Keeping track of every sales transaction 
  • Reviewing tax information for each transaction to ensure accuracy 
  • Taking the time to ensure that tax matters are handled and documented appropriately 
  • Creating a sales statement that includes accurate sales transaction and tax-related information for a specific period

Facing an audit can seem like a waste of time, but the IRS has a duty to ensure that businesses are reporting their sales tax information accurately. By having necessary information and evidence at the ready, Atlanta business owners may be better able to defend against the scrutiny of the IRS and avoid possible penalties. After receiving notice of an audit, business owners may want to contact experience tax attorneys to determine their best options on how to proceed.