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Many business owners ask: How can I avoid an IRS audit? <\/em>The good news is that the odds against being audited are in your favor. In fiscal year 2018, the IRS audited approximately 0.6% of individuals. Businesses, large corporations and high-income individuals are more likely to be audited but, overall, audit rates are historically low.<\/p>\n There\u2019s no 100% guarantee that you won\u2019t be picked for an audit, because some tax returns are chosen randomly. However, completing your returns in a timely and accurate fashion with our firm certainly works in your favor. And it helps to know what might catch the attention of the IRS.<\/p>\n Audit red flags<\/strong><\/p>\n A variety of tax-return entries may raise red flags with the IRS and may lead to an audit. Here are a few examples:<\/p>\n Certain types of deductions may be questioned by the IRS because there are strict recordkeeping requirements for them \u2015 for example, auto and travel expense deductions. In addition, an owner-employee salary that\u2019s inordinately higher or lower than those in similar companies in his or her location can catch the IRS\u2019s eye, especially if the business is structured as a corporation.<\/p>\n How to respond<\/strong><\/p>\n If you\u2019re selected for an audit, you\u2019ll be notified by letter. Generally, the IRS won\u2019t make initial contact by phone. But if there\u2019s no response to the letter, the agency may follow up with a call.<\/p>\n Many audits simply request that you mail in documentation to support certain deductions you\u2019ve taken. Others may ask you to take receipts and other documents to a local IRS office. Only the harshest version, the field audit, requires meeting with one or more IRS auditors. (Note: Ignore unsolicited email messages about an audit. The IRS doesn\u2019t contact people in this manner. These are scams.)<\/p>\n Keep in mind that the tax agency won\u2019t demand an immediate response to a mailed notice. You\u2019ll be informed of the discrepancies in question and given time to prepare. You\u2019ll need to collect and organize all relevant income and expense records. If any records are missing, you\u2019ll have to reconstruct the information as accurately as possible based on other documentation.<\/p>\n If the IRS chooses you for an audit, our firm can help you:<\/p>\n Don\u2019t panic if you\u2019re contacted by the IRS. Many audits are routine. By taking a meticulous, proactive approach to how you track, document and file your company\u2019s tax-related information, you\u2019ll make an audit much less painful and even decrease the chances that one will happen in the first place.<\/p>\n \u00a9 2019 <\/em><\/p>\n <\/body> Many business owners ask: How can I avoid an IRS audit? The good news is that the odds against being audited are in your favor. In fiscal year 2018, the IRS audited approximately 0.6% of individuals. Businesses, large corporations and high-income individuals are more likely to be audited but, overall, audit rates are historically low. […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[19],"tags":[],"class_list":["post-14161","post","type-post","status-publish","format-standard","hentry","category-small-business"],"_links":{"self":[{"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/posts\/14161","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/comments?post=14161"}],"version-history":[{"count":0,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/posts\/14161\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/media?parent=14161"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/categories?post=14161"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/tags?post=14161"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}\n
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