Tuesday, September 1, 2009

The Best Secret To Surviving an IRS Tax Audit

One shortcoming that most of my tax audit clients share is the failure to keep good records. I understand why, recordkeeping can be time consuming and running the day to day operations of a business takes priority. The problem is, if the IRS audits a person or business with bad records, it will likely result in a substantial tax liability because legitimate expenses cannot be proven. Because the burden of proving those expenses is on the business owners, no records = no expense deduction.

So, I preach good recordkeeping. It can be the difference between surviving an audit and going under because of the audit. The IRS agrees and has provided a brief discussion on recordkeeping and useful links on its website. Because the IRS is the group that will want to see your records, it makes sense to keep the kind of records that they will want to see. To learn more, I encourage you to check out the IRS news item "Keeping Good Records Reduces Stress at Tax Time."

No comments: