As an aspiring entrepreneur, it's imperative to pay your taxes. The government will regularly check and evaluate whether or not you have correctly paid the amount that you owed in terms of taxes. As a result, you may be visited by tax auditors from time to time for a tax audit. Unless you have kept the payment records in a safe place, you may find it difficult to prove that you have actually paid the correct amount. Here are some tips that could help you get through a tax audit.
Properly Prepare Your Documents
It's a common practice to pay more than you owe and have that amount deducted from the next tax payment that you owe. However, in order to prove that, the auditor will have to evaluate the accuracy and validity of the amount. You will be required to provide the auditor with the sales tax returns, your corporate book, the chart of accounts, sales invoices, federal income, as well as any other important business-related records. Throughout the year, you have to closely document your income and transactions in order to be able to produce the right documents during the tax audit.
Allocate Enough Time for the Tax Audit
Tax audits can be time-consuming and tedious, which is exactly why you need to make sure to allot plenty of time for them. It's also possible for the auditor to want to run a second tax audit to get a more detailed report on your records. Even if you think it won't be necessary, it doesn't hurt to prepare yourself for it in order to avoid wasting more of your time. Remember to have your exemption certificates and the cash register records ready for the second audit.
Tax Consulting Services
You can also refer to the services of a professional tax consulting company with the necessary qualifications and knowledge in computing the rates of sales tax. Upon hiring them, they will be able to organize all your tax paperwork and get it ready for the audit. Should you run into any issue with the audit itself, they will also provide you with the proper guidance as to how to approach a solution to the problem.
Appealing the Audit
If you consider that the findings of the auditor are incorrect or inaccurate, you could choose to appeal your case. You should be ready for the defence and have every document prepared. When you file one of these motions, you should take into account the possibility of going to court, if the problem does not work out in your favour. During this phase, the tax records will be closely analysed, so you should be prepared for a long battle.
For more information, talk with professional auditing agencies, like Boyd & Associates.Share