Underreported income is one of the most common reasons a small business would get audited. While determining whether to audit you, the IRS cross references your industry and locality to know what the typical deductions for a similar-sized business would take and how much.

While it may seem like S corporations pay more in taxes, they usually pay less than sole proprietorships or partnerships with similar income levels because they are more profitable.

You will receive notice of the IRS’s intent to audit you in the mail. The audit will happen either by mail or an in-person interview to review your records. The interview may be conducted at an IRS office or your home, place of business, or your accountant’s office.

There are four types of audits the IRS might conduct as they look into your small business finances. The four types of audits include Correspondence, Office, Field, and the Taxpayer Compliance Measurement Program. Whichever type of audit you receive, you’ll want the professionals at 1-800Accountant in your corner.

There are numerous benefits to utilizing a robust audit defense. It gives you peace of mind and the ability to fight the IRS on even ground. 1-800Accountant’s Audit Defense service ensures all of your income tax audit materials are in order and ready for IRS scrutiny.