For Manhattan business owners, the prospect of an audit can extremely intimidating. Minor omissions or oversights may become much larger issues when reviewed by the IRS, which can jeopardize a business’s chance of ongoing success. To this end, having the right information is crucial to mitigating the damaging effects of an audit.
According to the IRS, a business may be randomly selected for an audit, or the process may be triggered by an issue within the tax return. During an audit the IRS will review the return in question, as well as associated financial records, to ensure the filing is in compliance with the current tax code. There is no set length for how long it will take the IRS to reach a conclusion. In general, it depends on the complexity of the return, whether the business owner agrees with the findings and the availability of supplemental documentation.
Those undergoing an audit must be afforded certain rights by the IRS, including being provided a reason why an audit is occurring. The subjects of an audit also have the right to appeal any decisions made by the IRS and can opt for professional representation if they choose. Employees representing the IRS must behave in a respectable and professional manner when interacting with the subjects of an audit.
There are some things business owners can do during an audit to protect themselves against further repercussions. Entrepreneur recommends getting a jumpstart on organizing financial records immediately upon learning of an audit. Some documents can take a while to procure, which will serve to delay the process if swift action is not taken. Additionally, those being audited should refrain from offering too much information. While giving a truthful accounting of the situation is imperative, it’s best to only address the specific queries of an auditor.