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Receiving an audit notice from the IRS is a stressful situation for any business owner, often triggering fears of having stern auditors combing through all your financial records. Fortunately, most audits are much less intrusive, although the process can still be difficult without the help of a tax preparation professional. Understanding the audit process will help you navigate this experience as quickly and easily as possible.

What Is an IRS Audit?

When the IRS discovers a discrepancy between your tax returns and information reported by other companies, they’ll usually ask for clarification. Claiming certain credits or deductions can also trigger closer scrutiny of your tax returns, especially if they dramatically reduce your taxable income. Depending on the circumstances, the IRS may ask to see specific receipts and documentation or take a closer look at your finances.

Understanding the Audit Process

tax preparationFortunately, most audits are conducted through the mail, so you likely will not have to meet with an agent in person. Your initial audit notice from the IRS will typically explain the issues that attracted their attention and what documentation they need.

In many cases, copies of your receipts can be mailed in, but you may have to bring documentation to the auditor’s office for an in-person review. At the conclusion of the audit, the IRS will either decide that your initial returns were correct, or require that you file an amended return and pay any additional taxes owed.

How a CPA Can Help

If you’ve been singled out for an audit, a certified public accountant will represent your interests and communicate directly with the IRS for you. After reviewing the audit notice, the CPA will determine the corrections to be reported and calculate the true tax balance or refund owed.  It is important to remember that the IRS notices often reflect only partial information and may not reflect the correct amount of tax owed by the taxpayer. A CPA can help ensure that the IRS proposed changes are correct, and if not, correct them for you.  Having a CPA help with your initial tax preparation can also prevent audits in the first place by avoiding many of the issues that often trigger a closer review.

 

Whether you need accurate, responsive tax preparation or help with an audit, turn to Donna J Troutman CPA PC, a skilled accounting firm in Lewisburg, PA, dedicated to giving every client personal attention and effective advice. They help individuals and businesses navigate IRS audits and the complexities of the tax laws. Visit their website for more on tax preparation and other services, or call (570) 523-7337 to make an appointment today.

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