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Bay Area Estate And Tax Planning Law Firm
Estate Planning
Trust Administration and probate

Small businesses and IRS tax audits: a bit of germane info

| Aug 23, 2016 | Audits |

Most Americans well note the investigatory power and enforcement clout of the Internal Revenue Service. Indeed, many millions of people go into heightened-stress mode whenever they think of the IRS.

And, interestingly, that includes legions of filers in California and nationally who go about their taxes in steadfast good faith, never harboring the slightest thought to fudge on a return or otherwise deceive regulators in any way.

That of course includes most small business owners across the country, who seek to duly comply with all applicable rules and regulations as they complete their tax returns each year.

Many of those business people suffer material angst as they attend to that task, notwithstanding that they routinely make efforts to be exacting and accurate.

We address that concern in an article on our tax law website at the Alameda County Law Offices of Connie Yi, PC, specifically, the steps that a small business owner can take to lessen the chance of being audited by the IRS.

Concededly, there is no sure-fire way to guarantee audit avoidance. However, a conscientious business owner can indeed do certain things to better the odds that an IRS mailer won’t arrive in the mailbox. Smart steps to take include these actions:

  • Clearly bifurcating business and personal expenses (in other words, don’t commingle)
  • Ensuring that all taxable income is duly reported (that sounds obvious, but complexity can yield error)
  • Being extremely careful when reporting tax deductions
  • Consulting with an experienced tax attorney

That last-mentioned tip can yield helpful information up front, both while a business is being established and as returns are being filed. Additionally, having proven tax counsel on hand in the event of an audit can obviously benefit a filer having questions/concerns and needing legal representation.


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