When it comes to an IRS audit, it’s far better to have a personal audit conducted than a business audit. The business audit is much more in depth and can sometimes be intrusive. The fact that if the IRS finds a mistake, they can force you to temporarily close down your business adds additional stress to an already tense situation. You don’t want to go through a business tax audit without the assistance of a highly experienced tax audit attorney.
Yes, You Need a Tax Audit Attorney
It’s amazing how many business owners assume that they can make it through the audit process without the help of an attorney, and the smaller the business, the more likely the business owner is to make this assumption. The main reason that so many business owners try to avoid using an attorney during the audit process is because they’re worried about the cost. What most discover is that having an attorney on hand actually ends up saving them a great deal of time, stress, and money.
From the moment you sign up with a tax audit attorney, they handle all of your dealings and communications with the IRS, leaving you free to worry about the million things you need to do to keep your business running smoothly. After each meeting with the IRS, the attorney will explain what happened and help you prepare for the next step in the business audit process.
Even before the audit officially commences, your tax audit lawyer will look at your business, your business tax returns, and your businesses financial status and look into different things they can do to minimize any backlash the audit might trigger, including protecting you from Shareholder Derivative Suits if you have shareholders. The best thing that your tax audit attorney does is monitor the IRS auditor handling your case, making sure they don’t overstep their authority and harass your vendors, employees, or customers.
When Should You Hire a Tax Audit Attorney
You shouldn’t wait until you have a dispute with the IRS tax auditor to hire a tax lawyer. In fact, you should have a business tax lawyer in your corner long before you learn your business is about to be audited.
The best time to connect with an attorney who’s experienced with business taxes and IRS audits is when you’re still in the process of creating your small business. The tax attorney will advise you on the best way to set up your company and help you avoid doing something that could lead to an unintentional tax mistake down the road.
Even though your attorney might not be able to prevent your small business from ever being audited, having one in your corner can help ensure that your don’t do something that inadvertently raises one of the red flags the IRS uses to determine which businesses it’s going to audit. Before you file your taxes each fiscal year, the attorney will take a look at your businesses financial states and explain how you can use federal and state tax laws to protect yourself, your business, and your customers.