Whatever the organization or company, there will be always financial operation taking place all over. In all companies’ financial departments, audits will take place, both internally and externally. The internal audit is carried out in order to maintain the financial documents and reports properly, so that in case of any external audit from Government or other organizations, those reports can be provided to them properly. One such type of audit is IRS audit. In this article, we are going to see about it and some precautious guidelines from elder law services to avoid it.
IRS stands for Internal Revenue Service audits. As the name implies, these audits involve the examination of a particular organization or an individual’s financial accounts and information in order to ensure that the information reported is correct based on the taxation laws and also to check whether the tax amount mentioned is correct. Normally, you will be notified in prior and your documents are reviewed either through mails or personal interviews. Such meetings may take place at places like auditing office, tax payer’s home, their business office or at the accountant’s place.
There are different types of IRS audits as follows:
- Correspondence Audits – These audits are handled through written correspondence as the name implies. The entire process can be handled through a normal letter, a formal audit letter or through an official mail.
- Office Audit–This type of audits will be taking place at your office in a full fledge. After an official letter from the IRS Office, followed by the auditing process and inquiries on the particular date mentioned. In case of any mistreatment, you can appeal to curt.
- Field Audits – This is a very rare type of audit, where an agent from the IRS Office will reach your home or place of business and conduct the audits. In such cases, it is advisable to have an attorney or a pro auditor with you.
Tips to keep out of IRS Audits
According to the guidelines from Elder Law Services, the following guidelines can be remembered in order to keep ourselves out of troubles during such audits:
- First prioritization will be given to those solo guys since these guys will be poor in record keeping and hence the IRS agents can be easily found them out. Keep proper maintenance of all your records at the first place.
- Next, the small businesses complaining about their losses will be targeted to verify whether they are telling truth. In order to maintain your credibility, keep record of all your transactions and business details perfectly.
- Usually, only one year will be selected randomly by the IRS Auditor. In case of any problems, it will lead to a triple audit – auditing for three years.
Keep in mind the above mentioned points and maintain all your records properly to get out of this issue.