Tax And Auditing Tips For Small Companies
The recent audit trends indicate that the small and medium business entities are not complying with the requirements set by the tax authorities. As a result, the tax authorities are experiencing shortfalls in the annual revenues. To address this problem, the tax authorities are forced to conduct frequent audits for the small businesses that don’t seem to comply with the taxation rules. If you are a small business owner, it is advisable to hire tax professional to help you identify and deal with the tax issues that could lead to audit.
Why Your Business Is Likely To Be Audited
There are two major reasons why your company is likely to be audited. The first one is the outcome of any past history of audits of your company. With the help of a tax professional, it is quite easy for you to notice issues that came up during the audit. You can reduce the chances of an audit significantly once you address these issues.
The current tax reports could also result in audits. Even if you have already submitted the tax returns to the relevant authorities, it is advisable to review the report and take note of any issues and how you can resolve them.
Get Ready For The Audit
Even when you have done everything right; you cannot eliminate the chances of an audit. You should always have a team of professional taxation team ready to handle any tax issues. Also, you should identify a competent tax professional who can represent your firm during an audit. With a competent and experienced accountant on your side, you can be assured that most of the issues that may arise during the audit will be resolved effectively.
The representative is usually responsible for negotiating with the team from the tax authorities and providing the relevant documents If you want to meet the tax obligations of your company, it is advisable to equip your accounting team with the relevant information they require. Doing this minimizes delays, time wastage and inconveniences during an audit.
What Should You Expect During The Audit
Every business irrespective of how small or large it is should have a record as proof of every transaction. To ensure clear records of all the daily transactions, it is advisable to hire competent accountants to handle the task. You are likely to be asked to provide evidence of a specific transaction during an audit.
You should be careful when providing records and keep this in mind.You should offer only the records requested by the auditing team. Giving the auditing team more information than what is requested might bring out more issues that may complicate the process.When you hire competent and experienced professionals for the task, he or she will provide the required information and provide the relevant responses. This is what you need to avoid auditing problems.