If you’re selected for a business audit by the IRS for the first time, the process can seem intimidating. You may have many questions about why your company was chosen, which a certified public accountant (CPA) can help answer. To prepare you for your upcoming audit, here are some steps to take as soon as you’re notified that your business will receive one to prevent fines and a lengthy process.

Get Ready For Your Next Business Audit

1. Review Past Taxes

As soon as you receive an audit request, consider going through your tax return with a CPA or your accounting team. While audits can be random, they’re usually triggered by inconsistencies in your return. Review that information such as your income and claimed credits apply to your business, as these areas will be closely looked at by an IRS auditor. Your CPA or accountant will be able to identify sections that might’ve triggered the audit and foresee questions you might be asked to help prepare you.

2. Gather Necessary Documents

During a business audit, IRS agents will go through your financial records to verify that your expenses, income, and credits match what was filed in your tax return. To provide evidence that supports your case, gather any bank statements, receipts, canceled checks, ledgers, appointment logs, and paystubs that pertain to that year. If the audit is being conducted by mail, you’ll need to mail these, or keep them on file if you’re getting a visit from an agent.

3. Read Up On Your Rights

During an audit, you have certain protected rights. In addition to having the right to being treated fairly and professionally by IRS employees, you also get complete confidentiality regarding your financial information. Business owners also have the right to representation and to appeal decisions, so consider having a tax attorney or CPA with you during the process. With the help of these financial professionals, you can resolve any issues as they come and potentially prevent future audits with a thorough and correct tax return.

Whether you’re getting ready for a business audit or want to review and improve your financial procedures, the team at Engelson & Associates, Ltd. in La Crosse, WI can help. Their experienced CPAs can help with everything from tax preparation, bookkeeping, and QuickBooks™ systems to help you keep track of your company’s financials and help prevent business audits. Find out more about how they can help by visiting their website, or call (608) 526-3437 to schedule a meeting.