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 departments are not meeting the revenue projections. This has prompted frequent audits on the companies that don’t seem to meet the tax requirements. 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.
Your business is likely to be audited for two main reasons. The first one is the outcome of any past history of audits of your company. When you hire a professional tax expert, he or she is likely to help you identify and resolve the issues that were identified 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. It is advisable to check the latest tax reports and take note of any issues even though you may not change the returns you submitted to the tax authorities.
Be Prepared For Auditing
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. Besides, you need to identify one of the best tax professionals to represent your organization in the case of 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 company representative is responsible to providing all the relevant documents and negotiating the terms of the exercise if the need arises. You should also provide your team of accountants with the relevant details to meet your tax obligations. This will reduce inconveniences and time wastage during an audit.
What Should You Expect During The Audit
Every business regardless of its size should keep clear records of all the transactions. You should engage competent and experienced accounting team to keep accurate records. During the audit, you may be requested to provide an accurate record of a particular transaction.
You need to be careful and keep a few things in mind when providing the evidence of certain transactions. It is best to avail on the records of the transactions requested by the auditing team. Providing more that you are requested might end up bringing up new issues that may be difficult to solve. An experienced tax expert can provide the necessary information and respond to queries effectively. This is what you need to avoid auditing problems.