As a small business owner, there are few things as frightening as receiving an IRS audit notice.
Even the most confident and meticulous book-keepers can instantly be filled with fear and doubt. The IRS pouring over financial records looking for potential problems is always stressful.
This is particularly true for owners who transact much of their business in cash. For example, gas station owners. Cash transactions can sometimes be more difficult to accurately track, meaning it is easier to make an accidental mistake.
However, despite your potential fears (yes, most people get very scared after they receive a letter from the IRS), you need to remain calm and take the appropriate steps.
With that in mind, below are four things a gas station owner should consider doing after receiving an IRS audit notice:
- Contact an attorney: Probably the most important thing you should do is call an experienced tax lawyer right away. An attorney can explain the letter from the IRS. They can also detail out the audit process and help make sure everything is handled properly.
- Determine what the IRS wants: Take the time to read the notice from the IRS and determine what they actually want. For instance, it may simply be an issue related to missing documentation. However, if you are not clear as to why you are being audited, you should ask for more information.
- Get your records together: After you figure out what the IRS is looking for, you will need to gather the information and documentation needed to back up your claims. This may include bank statements, receipts, mileage logs, etc. Only provide what is being requested and make sure to keep the original copies of the documents.
- Implement a better record-keeping system: Even though most small business owners don’t want to waste their valuable timekeeping records, it is a necessary evil. Sometimes it may be too late for it to help during a current audit though. Therefore; an improved record-keeping system will be beneficial should you ever be subjected to an IRS audit again.
Keep in mind, the information above is simply meant to serve as a suggestion of what steps may be helpful should you ever receive an IRS notice, and therefore should not be considered legal advice.
Simply put, every situation is different. Each set of circumstances may require a different response. This is why it is so very important to contact an experienced tax attorney right away.