What IRS Auditors Look for When Examining a Business
Recently, a client asked me about the IRS and what they might look for in an audit. * He keeps great records and is very careful not to "co-mingle" funds. * All cash received is deposited to the company business checking account. * And, in an effort to better control cash purchases, he has opened a separate bank account that he funds periodically from the business operating account. * He then carries the ATM debit card for that account and makes "cash" purchases with that card. * Additionally, all workers are either employees or licensed contractors. I found a great article from Wells Fargo that I think provides a great check list for some of the most common issues the IRS may consider when reviewing a business file in an audit. Here is an excerpt from that article: In the case of audit, be aware that the IRS training manual tells its auditors that they are examining you, not just your tax return. The auditor wants to see how you match up with the incom...