If you have received a business audit from the IRS, call the revenue agent assigned to your case and schedule a mutually convenient time to meet. Because your business bears the burden of proof in a business audit, it must prove that the records are correct, accurate, and complete. If you cannot meet this burden, additional taxes will be assessed. Therefore, it is important that records are organized and easy to follow.
What should I expect at the IRS audit meeting?
The IRS meetings are not meant to surprise you with new documents that you may have never seen. In fact, you most likely received a list of the purported mistakes in the IRS letter apprising you of your business audit. Simply put, you will go into the meeting with any evidence you have that shows your records are accurate and that you have paid the correct amount of taxes. Be sure to address only the specific instances mentioned in the notice and give evidence that is directly applicable.
What would the IRS consider proper audit evidence?
What type of evidence is considered proper depends on the allegation. For instance, if the IRS notice mentions an I-9 form that was not filed from a client, verify that you do not have that I-9, and determine why. If it was a bookkeeping mistake on the part of the client, contact the client and request an amended I-9.
Another common example is the IRS mentioning specific sales figures that did not add up with your final declared income. In these cases, present the IRS agent with the sales figures and possibly the sales receipts from the dates in question to verify the amount. In addition, you may want to print off the applicable bank statements to show the amounts deposited into your business account.
If you still have your doubts about the legitimacy of the IRS claim after your meeting and the IRS continues their attempts to collect from you, you may wish to contact a tax attorney for a consultation.