Everyone has to file tax by the end of the year and it worries them a lot but it can be worrying for the businesses when there are unexpected IRS’ Tax audits. It happens when there is a mistake or any manipulation which is felt by IRS. There can be sometimes intentional or unintentional mistakes which can be pointed out by IRS and you get to hit by the IRS’ tax audit. If you haven’t done anything wrong then you surely do not need to worry about it at all. On the other hand, if some people try to manipulate the taxation then it catches the eye of IRS on the first glimpse.
The IRS’ Tax audits occur when there are mistakes in the form or IRS receive something which they do not expect. Most of the audits done by IRS are based on suspiciousness so if you are being audited this month then there must be something wrong.
Why IRS’ Tax Audits?
It can be surprising for some companies to get the audits all of a sudden whereas others may get scared to see the team of auditing. Here are something which can make the IRS suspicious and you need to be careful about it.
- Math Errors
There can be one or two errors in the form which is normal but should not happen on your end. However, if there are multiple Maths error then it can be alarming for the IRS. Prefer not to make any mistake in the form and recheck it again and again before you file the taxes. People can make mistakes but you have to proofread your own work so that you do not leave a doubt on IRS. If you are not good in Maths then prefer to hire an accountant who can help you with the process of filing taxes. You will not make any errors and will be safe from the unexpected audits as well.
- Not Reporting Income
There is a detailed section in the tax filing form for the income. You have to mention the income of every month collectively and if you do not, then you are inviting the audit by yourself. You tempt the IRS to check on you when you are hiding the main amount and source of income for your company or individually. Well, it is not hard for IRS to find out about your income but it will surely compel them to check on you.
- Donations Claim
If there is extra donation claim then it can be fishy for the IRS. A well-deserved amount of charity is acceptable but if you cross over it then it can be false according to IRS. The amount may be going somewhere else and no one would know. IRS can quickly identify that if you earn $30,000 and monthly $10,000 is on the donations, then it can be alarming for IRS to do the audit on you.
- Report of Losses
If you mention about too many losses in the business and it is still running then it can raise the eyebrows for the IRS. How and from where you are receiving the income to overcome the losses. You have to mention every detail in order to avoid the audit get to your company.
Know that whenever there is an audit of the company, there is something hidden which comes out. It can ruin the image of the company in the market and it might have to bear loss as well. So it is better to contact the professional accountant to do the work for you while you can participate as well.
An expert can fill in every section with detail and won’t miss any of the important information which needs to be filled in. You just have to provide the documents and be there to know what it requires so that you are aware of the activity of the accountant as well. So do not wait until the last moment when you get hit with the IRS’ tax auditbut work towards the direction where it does not lead towards the audit at any time.