Many business owners might don’t know anything about a tax audit. It is a formal examination conducted by IRS to verify the information and they will also check whether you are paying your tax properly. Tax audit will also verify that the financial information that you have submitted. If you are a business owner and you want to run your business smoothly, then you need to make sure that you pay your tax from time to time. This is one of the very first things that you need to perform every year, if you have no time idea about taxation, then you can hire tax return accountant Palmerston. They will fill every kind of tax at the right time and they will also make sure your business is saved from any other further chaos.
As a matter of fact, every audit is not created equally and it depended upon the situations. There are 3 major types of tax audit that you should know.
CORRESPONDENCE AUDIT
Correspondence Audit is one of the most common audits performed by the IRS team. In this type of audit, you will get a letter or mail from the IRS team requesting you to send them all the information about your business and current financial status. After the verification is done, they will send you the notice about the tax obligations and the payment for the tax obligations. If you have full confidence in your financial records, then you can send them the required documents in favor of your business. If you agree to your mistake then you need to send the payment for the tax obligations. The required documents should support your favor so as it can save you paying any further payments.
FIELD AUDIT
A field audit is one of the compressible and takes more time. In this tax officers and the team will come to your office and check all the required files and documents. This is one of the complicated audits as they will check all the financial records and they can also question your employees. There is no certain time frame for this kind of audit as it varies from situation to situation. They can also question about the financial deals, so make sure that you answer them carefully. If an officer has any doubt about the financial record then you are going to end up in a messy situation.
OFFICE AUDIT
The office audit is very simple where if the tax officer will call you to their office to perform an audit. After submitting all the required documents then they can ask you to come to their office to check all the required documents. The office audit is very simple and it also doesn’t involve any complexity. The audit work may get extended if the auditor suspects about any other problems in different areas. In an office audit they will ask you questions about the financial records, employees and other related questions. This audit will take your one day but if the auditors want any further information, then they will give you an ample amount of time to get prepared.
