Tax And Auditing Guide For Small Companies.
The recent audit trends indicate that the small and medium business entities are not complying with the requirements set by the tax authorities. As a result of this, the tax authorities are unable to collect enough revenues annually. To solve this problem, they are initiating frequent audits for the companies suspected of not complying with the taxation rules. If you run a small business, it is advisable to hire tax experts to help you identify and resolve issues that could lead to audits.
Common Issues That Lead To Audits.
Your firm may be audited for the following two reasons. The first one is the outcome of any past history of audits of your company. With a reliable tax expert on your side, it is quite easy to identify the issues that led to the audit and address them immediately. Once you resolve these issues, you have reduced the chances of audits significantly.
The other thing that could result in audit the problems in the current tax reports. Even if you have already submitted the tax returns to the relevant authorities, it is advisable to review the report and take note of any issues and how you can resolve them.
Be Prepared For Auditing
Even when you have done everything right; you cannot eliminate the chances of an audit. You should always have a team of professional taxation team ready to handle any tax issues. Also, you should identify a competent tax professional who can represent your firm during an audit. The more experienced the tax professional is, the higher the chances of addressing complex problems that may arise from the audit.
Your business representative takes part in the auditing exercise by providing all the required information and negotiating the terms if need be. If you want to meet the tax obligations of your company, it is advisable to equip your accounting team with the relevant information they require. This will reduce inconveniences and time wastage during an audit.
What Should You Expect During The Audit
Every business regardless of its size should keep clear records of all the transactions. It is crucial to hire reliable accountants to keep clear records of all the transactions that take place on a daily basis. You are likely to be asked to provide evidence of a specific transaction during an audit.
When providing proof of certain transactions, you should keep a few things in mind. It is best to avail on the records of the transactions requested by the auditing team. Availing more documents that you are requested increase chances of newer issues coming up, this might complicate the entire process.When you hire competent and experienced professionals for the task, he or she will provide the required information and provide the relevant responses. With this, you can effectively solve tax and auditing issues.