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When the tax man comes knocking at the door of a small business, the visitor can cause an owner to go dizzy with questions of what to do next, and how best to handle the overall tax audit process. And who better to answer those questions than the Internal Revenue Service, which now offers small businesses a guide to tax audits. The video series entitled, "Your Guide to an IRS Audit" is a step-by-step guide to a small business audit.
The tax tutorial is told from the hypothetical perspectives of an auto repair shop, a computer repair shop, and a flower shop owner to help those faced with a small business audit navigate his or her way through the process as smoothly as possible. The video, which can be viewed at any time, is a welcome visual and audio addition to the webpages full of information on the IRS website. And for those small business owners in need of a popcorn break, a convenient "bookmark" feature allows a viewer to leave and return to specific portions of the video.
Some key questions the video answers: how to prepare your tax records for an audit, what happens after your first IRS appointment, whether you should get a representative, what are your payment options if you are found to owe money, and what happens when you agree or disagree with the audit findings. The hypotheticals also address a business owners' rights and responsibilities throughout the tax audit process.
In the end, the chances of an audit for a small business are still relatively slim, but on the rise. One of the main points of the video applies to small and large business alike -- the importance of keeping detailed records. In the event that the IRS does examine a company's financial statements, the presence of accurate and organized records will serve to expedite the investigation.