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Taxation is an inevitability for all. No matter if you’re an individual or a large business, not paying taxes stands to invite significant penalties from the IRS. However, while an individual might only accrue penalties, a business might have to report for a fully-fledged audit! Tax issues are already a source of stress and confusion for many, with complex tax regulations proving to be a demanding process for even the most seasoned entrepreneurs. With an IRS Audit looming over the horizon, stress levels are sure to shoot up!
A wise business must enlist the support of a tax consultant in West Houston, TX to navigate any audit. These experts can represent your interests during an audit. Additionally, they can also prepare the business for the upcoming audits with accurate documentation. To accurately deal with any discrepancies highlighted by the IRS, the expert can help you identify the best option and negotiate for the same accordingly!
Having an expert tax consultant who understands the intricacies of tax laws is an extremely wise move. After all, they are in the best position to offer a tailored solution. Here’s how the representation process works…
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IRS Audit
The first and foremost requirement is dealing with the Audit directly. An IRS Audit involves a comprehensive examination of a business’s financial records. The IRS hopes that this process will check if information is reported accurately, and that any inaccuracy or error will be highlighted for clarification. This is a process deeply intertwined with tax laws, amounts reported, and the reality represented in reports. If the process generates any liabilities, your accountant can help identify the next steps…
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Offer In Compromise
Colloquially understood as an OIC, this is an agreement between the business and the IRS that will settle any and all liabilities for less than the full amount owed. This option can be a lifesaver for the cash-strapped business who might face significant hardship if they attempt to pay a full tax debt. However, it’s important to know that an OIC is a rare occurrence. It depends largely on the expertise and negotiating prowess of your tax consultant, so choose wisely!
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Installment Agreement
If paying in full is not possible, and an Offer in Compromise is off the table, the IRS might settle for an installment agreement. This would be a structured payment plan to pay off debt over time. A tax consultant can make a compelling case as to why a business might be suited to pay off the debt in installments. This depends on providing the required cash-flow statements, a general business plan, and an assurance that the business will do good on the agreement! The IRS is open to negotiating with the tax consultant, and can thus provide a favorable term.
While an audit might be overwhelming, it is important to look beyond it and consider the next steps. It’s essential to understand why an audit happened in the first place! What was the one key discrepancy that prompted the IRS to conduct an audit? Was it a series of errors that simply went unnoticed? Pondering these questions can help you identify how and where the business financials might have gone wrong. With the assistance of a tax consultant, you can identify these errors, and then add in controls for the same! Monthly bank reconciliations, larger strategic consultations, and general healthy bookkeeping practices can go a long way in negating any audit.
So don’t wait around! Ensure that your business is proactive in terms of finances by hiring the services of a tax consultant today!
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