Choosing the right tax preparer can help avoid business audits
Prior to the April 18 deadline, many small business owners will begin preparing their income tax returns and may be wondering how they can avoid mistakes that can cause an audit.
Prior to the April 18 deadline, many small business owners will begin preparing their income tax returns and may be wondering how they can avoid mistakes that can cause an audit.
One step business owners can take to reduce this possibility is to choose the right tax preparer to process the returns.
According to a recent National Taxpayer Advocate report, 60 percent of businesses, utilize third-party services to process their income tax returns, The Wall Street Journal reports. However, due to recent IRS regulations, if a tax preparer is suspected of making unwarranted deductions on any of their clients' returns, then all of their customers may risk an audit.
The IRS recommends businesses first check the tax preparer's qualifications, including their educational background and whether they have applied for a new Preparer Tax Identification Number. In addition, businesses should inquire about service fees and provide all records and receipts the agent will need to correctly file a return. Owners should also be sure to read through a tax return before signing and submitting it.
However, despite these precautions, companies can still be randomly selected for audits and businesses should be equipped with contingency plans just in case.
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These articles are all written by TaxLawHome.com's great editors and contributors. If you would like to write articles for TaxLawHome.com, please email editor[at]taxlawhome.com.
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