More IRS audits—especially on small businesses and their owners. This is one result of the added $80 billion in IRS funding over 10 years stipulated by the Act. The idea: More tax dollars mean less government borrowing.
Key to preparing: Ensure quick access to documents that support deductions and other positions on your company’s tax returns.
Current technology can capture images of documents efficiently and ensure they can be called up when needed. Make sure you have systems and processes that capture all receipts as well as documents and organize them so they are easy to locate.
Reviewing tax returns filed previously also can be helpful in finding errors before the IRS does, amend the incorrect return, and ensure that future returns are correct.
In your review, focus on favorite IRS targets—travel and entertainment expenses, owner-employee compensation, payments to related parties, and revenue received in cash.
If you need help with any of this, please contact me at kjohnson@proactbookkeeping
Reprinted by permission from AIPB