The idea of being audited can evoke a lot of stress. So although it’s important to remember that most people will never be audited, you can also do yourself a favor by being prepared. The more you know about how the IRS handles an audit, the better off you’ll be in the event that your tax return requires a closer look. Business owners can get ahead of the game by learning a little about the Audit Techniques Guides (ATGs).
Reviewing the Audit Techniques Guides (ATGs) for Business Activities
Audits can seem mysterious to the average taxpayer. But to the IRS auditor, it’s just another typical work day. They have a series of questions to ask, and they’ve been trained to look for particular details. Fortunately, we can gain insights into this training through the Audit Techniques Guides (ATGs). These are published on the IRS website, and provide a unique window into viewing the audit process as the auditor themselves will approach it.
Most of the ATGs center around business taxation. With that, there’s also a breakdown for common audit topics and categories. Using the search bar for “Audit Techniques Guide” can get you where you need to go. From there, you can filter down into your particular business activities. If your organization touches on any of these areas, the ATGs can help you discover what types of questions and audit risks the IRS will be curious about:
- Architects
- Art Galleries
- Attorneys
- Business Consultants
- Cash-Based Business
- Child Care Providers
- Construction
- Farmers
- Ministries
- Retail
- Veterinary Medicine
- Wineries and Vineyards
The IRS auditors are trained to scrutinize these types of companies in particular. Unfortunately, this means that you could be facing some more complicated questions in the event of an audit. By reviewing the ATG, though, you can start to think like an auditor yourself—knowing what to look for and how to respond!
Best Practices When You’re Being Audited
While it certainly helps to do your own research, one of the best things you can do when facing an audit is to ask for help. Some problems may be easy to solve, but you want to avoid the chance of inadvertently saying the wrong thing. It’s all too easy for an honest mistake to lead to another audit issue.
What’s more, you’ll also want to act quickly. Timely correspondence is critical. You don’t want to keep the IRS waiting for a response, and you especially don’t want any concerns raised by the IRS to escalate into a face-to-face examination. Reaching out to a tax professional right away can help put you in a better position to resolve any disputes ASAP.
Please Don’t Hesitate to Reach Out—We’re Here to Help!
No matter your industry, our team at NSO & Company can help you prepare your tax return correctly and answer all of your tax-related questions along the way. If you’re worried about the chance of getting audited or have already been contacted by the IRS, please don’t hesitate to reach out to our office. Give us a call at (317) 588-3131 so we can schedule a time to work through the issues and help give you peace of mind!