Receiving a business audit notice from the Internal Revenue Service (IRS) can be intimidating, but it doesn’t necessarily mean there’s an issue with your tax returns. In some cases, the IRS selects businesses at random. In any case, follow these steps for a stress-free audit.

Do:

Respond quickly.

Never ignore notices from the IRS, which could result in fines, interest, and other penalties.

You have 30 days to respond once you receive the notification by mail. The letter provides a full breakdown of what the agency needs from you and why you were selected.

Get organized.

Gather all of your bank statements and receipts, including online records. Make sure they’re organized by business expenses, income, and miscellaneous expenditure. You may also need to provide ledgers or journals if you keep them.

You don’t, however, need to overcompensate. If the IRS only wants to see records related to certain expenses, provide only applicable credit card statements. Sharing unrelated paperwork can delay processing.

Don’t:

Forget your auto and equipment records.

As you prepare all paperwork, don’t forget expenses related to business vehicles and equipment. Gather mileage logs, fuel and repair receipts, and evidence of asset depreciation.

If you use a vehicle or machine, such as a computer, for both business and leisure, you must prove its business use. One way to do this is by attaching work projects you completed on the device.

Wait to secure professional assistance.

It’s not easy to organize, especially while you manage day-to-day operations, so it’s smart to contact tax preparation professionals.

Certified public accountants (CPAs) help you gather the necessary paperwork and foresee potential problems. Sending accurate documents helps speed up the process. You can also partner with these tax specialists to better manage financial records and prevent future business audits.

If you’re facing a business audit, the professionals at Engelson & Associates offer all of the services you need. Based in Holmen, WI, this practice provides tax preparation, bookkeeping, and accounting services to the Tri-State Area. They help you navigate taxes to avoid liabilities and increase overall returns. Call (608) 526-3437 to discuss your needs, and visit their website to learn more about their company.