Going through an audit can be a bit stressful especially for a new company. However, it’s a very necessary process to ensure the legitimacy of a brand. You have to get a proper examination of your finances from someone trustworthy. They’ll look at a balance sheet, income statement, cash flow, changes in equity, and any explanatory notes. Typically if you’re an LLC or listed company, you’ll find out your standings through a report. They’ll see if your profits or losses are properly recorded and any assessments of what is owned or owed. Here’s how to get more audit preparation professional help.
Who Can Represent You In This Audit
Sure, you can create your own financial report, but it’s much better to have someone reputable to go over your organization. Pretty much it’s the individuals that can represent a taxpayer (Power of Attorney) who hold legitimacy in this particular sector. The three main people this includes are: an attorney, CPA, or an enrolled agent. Due to the credentials of each figure, they all can represent a business to the IRS. A good representative is thorough in their answers to an auditor. You might be nervous and slip up while a representative is quick on the spot. They certainly come in handy on the more thorough assessments and difficult questions you may have trouble answering. In the next section, we’ll talk about how this parlays in the interview process.
Having a Representative in the Interview Process
More often than not, the IRS wants you present during the audit. However, like a lawyer, you can have them guide you through this process to ensure your protection. A representative has the right to get back to the IRS when they ask questions and don’t really understand where they are coming from. The representative can discuss with you the specifics and get a definitive answer. It’s all about working back and forth between you and your representative. The IRS may request your presence at the audit but you don’t have to attend unless you get a subpoena. This is only in the most severe case. It’s good to be cooperative with the IRS but you can request your representative to answer all the questions. Additionally, a representative has the expertise to suggest you to answer certain questions or dismiss them in a respectful manner.
How to Negotiate Different Fees and Penalties
Sometimes, it’s good to have a third-party independent person to handle your business. Lets say you had someone prepare your audit but there are a few things that look like red flags. It may not be wise to have that original representative present. When you have another one and an IRS member sees something unclear, the independent representative can say that this mistake was unintentional on your part. Rather, it was the fault of the original prepare. You can get straight to the point and get some fees and penalties waived. However, if you don’t go about it this way, this audit can be tied up for years costing serious money that otherwise could’ve been used in your business. With great help, you’ll avoid shortcomings when you set up an audit.