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Picture this – your business is running smoothly. Employees are happy. Cash Flow is Positive. Brand Reputation is at an all-time high. But one unwanted piece of paper comes in and threatens to knock all of it down. This less-than-ideal situation is quite common when businesses are served with an IRS Audit.
An IRS chooses to audit an organization’s financial information to check for accuracy and compliance with tax laws and regulations. Naturally, it’s safe to assume that they’re doing this due to suspected tax fraud. The IRS largely intends to verify if the income reported is truthful as that determines the appropriate deductions, credits, and taxes filed.
An IRS Audit is stressful – it puts the entire financial health of the company at risk. But, when you have the best CPA in Seattle, WA representing your company, you’re sure to come out on top. Here’s why…
Audits Are Triggered Due to High Expenses and Complex Returns
It might just happen that your business strategy has unusually high expenses and equally intricate financial structures. Such complications were historically deployed in an effort to evade taxes, and today put an innocent businessman in crosshairs.
High Income Brackets
Much of the IRS recovery strategy is dictated by historical happenings and back data. The same data suggests that, ironically, businesses and individuals already earning a significantly high amount are much more likely to expend efforts in tax evasion. Increased revenue is often correlated with greater tax liabilities as well, thus garnering increased attention from the IRS.
The Reality
While pop culture and rumors have mentioned the opposite, audits are not always a full and in-depth investigation of the business. Remember, this is simply the IRS acting on suspicions. This means that a majority of the audits are simple notices and letters where the IRS is requesting additional information and clarification. It is only the rarest of rare occasions that an audit is a field audit.
The Solution
No matter what organization you are or what kind of audit the IRS is seeking – your business needs the accurate representation it deserves. Dealing with the IRS by yourself might be tempting – but the chances of unintentional miscommunication and further complications are just too high to risk here. Even the best of the best business owners are not up-to-date with tax laws. That’s not your fault, it’s just how tax laws are.
When you have an experienced tax professional representing you, your business holds the cards. These professionals have the necessary expertise and competence to effectively communicate and negotiate with authorities, thus negating any chance of miscommunication.
