Tax And Auditing Tips For Small Companies
From the recent tax and audit trends, it is clear that most of the small and medium companies 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.
Common Issues That Lead To Audits.
There are two major reasons why your company is likely to be audited. One of the main reasons is the outcome of the past audits conducted in your company. With a reliable tax expert on your side, it is quite easy to identify the issues that led to the audit and address them immediately. When you address the main issues that arose from the past audits, you minimize the chances of future audits.
The current tax reports could also result in audits. Although you may not change the tax reports that you have already submitted to the tax authorities, you should notice any major issues and resolve them immediately.
Get Ready For The Audit
The odds of being audited cannot be eliminated even when everything runs smoothly. You should always be prepared for it by having a competent team of experts and systems on your side. Also, you should identify a competent tax professional who can represent your firm during an audit. The more experienced the tax professional is, the higher the chances of addressing complex problems that may arise from the audit.
Your business representative takes part in the auditing exercise by providing all the required information and negotiating the terms if need be. You should also provide your team of accountants with the relevant details to meet your tax obligations. Doing this minimizes delays, time wastage and inconveniences during an audit.
The Actual Audit
Each company should keep a record for all the transaction that takes place. It is crucial to hire reliable accountants to keep clear records of all the transactions that take place on a daily basis. During the audit, you may be requested to provide an accurate record of a particular transaction.
You should be careful when providing records and keep this in mind.You should offer only the records requested by the auditing team. Availing more documents that you are requested increase chances of newer issues coming up, this might complicate the entire process. An experienced tax expert can provide the necessary information and respond to queries effectively. This is what you need to avoid auditing problems.