What You Need to Know About Small Business Audits

small business owner standing in front of her shopIf you live in El Paso and your business is being audited, you may want to hire an attorney who specializes in small business audits. Even though chances are low that you do get selected to be audited, it can come out to be an expensive process. Not just because of what the IRS believes you owe them, but also the amount time you have to reinvest from your business to this audit. A professional team, such as Clifford, Ross, Raudenbush & Cooper, can help you on both of those accounts.

Why are You Being Audited?

While an audit can appear to be random at first, there are actually a few factors that the IRS takes into consideration. When you file your taxes to the IRS, they all go through a process known as a discriminant index function, or DIF, score. This alerts the IRS of any abnormalities in deductions and income reported. If there are enough, then you increase your chance of small business audits. Another way of being flagged by the IRS is when they are performing small business audits on  businesses that you associate with. They will make sure that transactions with this other business are reported correctly and if they werent, they will likely audit your business as well. By being careful when filing your taxes, you can avoid being audited all together.

What to Do If You’re Audited

Still, if you are audited then you should  make the most out of the situation. If you for any reason forgot or neglected to claim a deduction, an audit is another opportunity to do so. This is because business overlook deductions such as home office expense and business mileage. Audits may seem scary but many businesses go through them year after year. So, if you choose a team to be by your side and help you out with issues, you can come out ahead. Don’t let an audit cause your small business to close down. Small businesses are the backbone of American culture and they require all the protection available. The very first thing you should do when you receive an audit is: don’t panic!

Let’s Take Care of Your Small Business Audits

Getting audited sounds like a scary endeavor but if done correctly, it can actually benefit you. Clifford, Ross, Raudenbush & Cooper has the expertise in small business audits to help you. Letting us get your taxes done the best they can, will let you focus on running your business the best you can.