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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 of this, the tax authorities are unable to collect enough revenues annually. 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 run a small business, it is advisable to hire tax experts to help you identify and resolve issues that could lead to audits.
The Main Reasons For Audits
There are two major reasons why your company is likely to be audited. One of them is the results of any past evaluation of your business by the tax authorities. 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.
Issues on the current tax returns could also lead to 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.
Get Ready For The Audit
Even when you have done everything right; you cannot eliminate the chances of an audit. It is advisable to be set with a team of tax experts and reliable systems that can handle any issues that may arise during an audit. 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 representative is usually responsible for negotiating with the team from the tax authorities and providing the relevant documents 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.
What Happens During The Audit?
Each company should keep a record for all the transaction that takes place. 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 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. 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. With this, you can effectively solve tax and auditing issues.