As a business owner, one of the worst news you can receive is that the government wants to audit your business. After all, an audit means the government is suspicious of your tax reporting and formal charges can easily follow. Below are some of the precautions you can take to avoid tax crime charges in such a case.
1. Use Professional Tax Programs
Tax issues tend to be pretty complicated and it is easy for a human being to make a mistake. Minimize the risk of human error by using professional tax programs to check your tax calculations. Ideally, you should have done this before filing your taxes. However, if you have already filed your return and the IRS are querying your filings, you can use a computer program to double-check the calculations.
2. Provide Proof of Claims
The IRS tends to be wary of large deduction claims. They might think that you are hiding something or playing a fraudulent game. Make it a point to provide proof for your deduction claims. This is even more necessary with large deductions. For example, if a natural disaster affected your business and increased your expenses, you should have the necessary proof such as pictures of the damage, receipts for repair work, and insurance reports for claims.
3. Consult Professionals
Tax law is complicated for many people, except tax professionals. You can make a mistake without even knowing that you have made a mistake. Take a proactive approach to avoid such mistakes by consulting relevant professionals. For example, you should consult a tax attorney as soon as you receive queries from the IRS or notice of an audit. You should also consult your accountant to help you understand the IRS's concerns. You can even request the IRS for additional time to get the necessary documents. Rushing will only worsen things for you.
4. Don't Volunteer Information
You should not hide things from the IRS, but you shouldn't feel the need to volunteer things either. Giving the IRS information they have not asked for is akin to giving your opponent ammunition to fight you. What if you reveal a mistake that you didn't even know existed? Cooperate with the IRS as much as they want, but stop short of volunteering information to them.
Hopefully, you won't face any charges related to tax crimes any time soon. If the government does charge you, consult services like McKone & Unruh to learn about crafting a strong defense for you.