IRS Business, Employer Tax Audit – IRS Tax Audit Help – Former IRS Managers
IRS Employer, Business Tax Audit – IRS Tax Audit Help 1-866-700-1040
There is nothing worse than getting a dreaded letter from the Internal Revenue Service that says you have a business or employer tax audit.
But do not panic. If you feel you have a clean tax return there is absolutely nothing wrong with you going in to IRS by yourself.
IRS business and employer tax audit’s can be very lengthily and it will all depend on which division is conducting the tax audit. If your IRS business tax audit is being conducted by an IRS revenue agent you can expect a more lengthily tax audit, if it is being audited by any other group, the audit time can be very short lived.
A lot will also depend on the information items that IRS is requesting as to how complicated or lengthy to tax audit it will be.
Being a former IRS agent I would carefully choose who is to represent your best interest. We have helped thousands of clients throughout the years and can give you an affordable and sensible approach to help resolve your IRS business or employer tax audit. To learn more below see the information about IRS tax audits.
Top 4 Questions we will ask you.
1. Which division is Auditing your tax return,
2. What is your exposure,
3. What happens if the IRS goes back 3 years,
4. How confident are you of your tax return.
What is an IRS Business or Employer tax audit?
An IRS audit is a review or tax examination of an organization’s or individual’s accounts and financial information to ensure information is being reported correctly, according to the tax laws, to verify the amount of tax reported is accurate.
The IRS Business Tax Audit Selection Process
Selecting a return for audit does not always suggest that an error has been made.
Business Tax Returns are selected using a variety of methods, including:
- Random selection and computer screening. Sometimes returns are selected based solely on a statistical formula.
- Document matching.When payor records, such as Forms W-2 or Form 1099, don’t match the information reported.
- Related examinations.Tax Returns may be selected for audit when they involve issues or transactions with other taxpayers, such as business partners or investors, whose returns were selected for audit.
Business Tax Audit Methods by the IRS
An IRS business tax audit may be conducted by mail or through an in-person interview and review of the taxpayer’s records. The interview may be at an IRS office (office audit) or at the taxpayer’s home, place of business, or accountant’s office (field audit). The IRS will tell you what records are needed.
IRS Tax Audits can result in no changes or changes. Any proposed changes to your return will be explained.
Business Tax Audit Notification
Should your account be selected for audit, you will be notified in two ways:
1. By mail, or
2. By telephone, no other methods are used by the IRS.
In the case of a telephone contact, the IRS will still send a letter confirming the audit. E-mail notification is not used by the IRS.
What your Rights During an Business Tax Audit
These rights include:
a. A right to professional and courteous treatment by IRS employees.
b. A right to privacy and confidentiality about tax matters.
c. A right to know why the IRS is asking for information, how the IRS will use it and what will happen if the requested information is not provided.
d. A right to representation, by oneself or an authorized representative.
e. A right to appeal disagreements, both within the IRS and before the courts.
IRS Business Audit Length
The length of each audit varies depending on the type of audit, the complexity of items being reviewed, the availability of information being requested, the availability of both parties for scheduling of meetings and your agreement or disagreement with the findings.Like I said before if your business tax audit is being conducted by an IRS revenue agent you can expect a much longer and more intense tax audit.
What Tax Records Needed for the Tax Audit
You will be provided with a written request for specific documents needed.
The law requires you to retain records used to prepare your return. Those records generally should be kept for three years from the date the tax return was filed.
The IRS does accept some electronic records. If records are kept electronically, the IRS may request those in lieu of or in addition to other types of records.
Contact your IRS tax auditor to determine what can be accepted to ensure a software program is compatible with the IRS’s.
Business Audit Determinations
An audit can be concluded in three ways:
1. No change: an audit in which you have substantiated all of the items being reviewed and results in no changes. Hooray!!!!!!
2. Agreed: an audit where the IRS proposed changes and the taxpayer understands and agrees with the changes.
3. Disagreed: an audit where the IRS has proposed changes and the taxpayer understands, but disagrees with the changes.
What Happens When You AGREE With The Audit Findings?
If you agree with the audit findings, you will be asked to sign the examination report or a similar form depending upon the type of audit conducted.
If money is owed, there are several payment options available. Publication 594, The IRS Collection process, explains the collection process in detail.
What Happens When You DISAGREE with the Audit Findings?
A conference with a manager may be requested for further review of the issue or issues. In addition, Fast Track Mediation or an Appeal request may be filed.
IRS Employer Tax Audits, Worker Classification
This new program will allow employers the opportunity to get into compliance by making a minimal payment covering past payroll tax obligations rather than waiting for an IRS audit.
This is part of a larger “Fresh Start” initiative at the IRS to help taxpayers and businesses address their tax responsibilities.
The new Voluntary Classification Settlement Program (VCSP) is designed to increase tax compliance and reduce burden for employers by providing greater certainty for employers, workers and the government. Under the program, eligible employers can obtain substantial relief from federal payroll taxes they may have owed for the past, if they prospectively treat workers as employees.
The VCSP is available to many businesses, tax-exempt organizations and government entities that currently erroneously treat their workers or a class or group of workers as non-employees or independent contractors, and now want to correctly treat these workers as employees.
To be eligible, an applicant must:
a. Consistently have treated the workers in the past as non-employees,
b. Have filed all required Forms 1099 for the workers for the previous three years
c. Not currently be under audit by the IRS
d. Not currently be under audit by the Department of Labor or a state agency concerning the classification of these workers
How to apply:
Interested employers can apply for the program by filing Form 8952, Application for Voluntary Classification Settlement Program, at least 60 days before they want to begin treating the workers as employees.
Employers accepted into the program will pay an amount effectively equaling just over one percent of the wages paid to the reclassified workers for the past year. No interest or penalties will be due, and the employers will not be audited on payroll taxes related to these workers for prior years.
Participating employers will, for the first three years under the program, be subject to a special six-year statute of limitations, rather than the usual three years that generally applies to payroll taxes.
IRS Business, Employer Tax Audit – IRS Tax Audit Help – Former IRS Managers