Tax Defenders know many business owners work so hard they don’t take time to think about their taxes, let alone the risk of an IRS audit. Nearly a quarter of all surveyed business owners failed to even know their own tax rate (CNBC, 2016). This can put you and your business risk. If you receive notice of a tax audit, it is because they have questions regarding your taxes And there are likely to be more questions to follow, questions that can end up costing you money, penalties, and even your business. Tax returns not filed can result in criminal penalties. In May 2018, the Police Commissioner of Baltimore City resigned after being charged with unpaid taxes, with a trial to follow.
Let’s start with basics about an IRS Audit. What can they review? The law allows an IRS audit to go back and review three years of filings and collect up to 10 years of back taxes. There are three types. The first is a mail IRS audit, which means the government will request information by sending you a letter with a request for specific information that you will send back to them by mail. This can go on, as all tax audits do until they are satisfied. The second is an office audit where they request that you come with information/paperwork to their office for review. Again, remember an IRS audit doesn’t end until they are satisfied with all your answers. Finally, a field audit is when the IRS visits you and your place because bringing all the records in or mailing would be practical. That means you could have the government in your place of business for awhile. Not turning over documents or failing to cooperate is never the right approach. The government may then draw conclusions in a light that is most unfavorable to you and your business.
An IRS audit does not have to end with more taxes and penalties for you and your business, but it often does. If the IRS finds that you paid less than 90% of taxes due, not only will they want the amount owed but also can assess penalties as well. They simply won’t wait until you feel you can pay. They have the option after an IRS audit of executing assets seizures, bank levies, wage attachments, even selling your business.
However, you don’t have to simply accept the results of an IRS Audit without a response. In fact, in 2016 over $1.6 billion dollars in additional were disputed by taxpayers who had been audited. In an IRS audit there often many cases where answers are unclear and it is easy for the Government to make wrong assumptions about what they review. This why IRS audit representation can be crucial, particularly when your business is at stake. The experienced professionals at Tax Defenders can help you by knowing what to look for and being an effective advocate. They can even help you regain your property if the IRS has seized your assets. The worst option is to do nothing. Contact Tax Defenders today to review your options.