The chances of your business every coming under the scrutiny of the IRS for a tax audit are pretty slim, but it does happen. In case it happens to your property management business, you want to make sure you’re prepared. To help, we’ve put together some tips to assist you, just in case you ever do get that business audit notice in the mail.
Tip #1: Delay the Audit
It can be a scary thing to get that audit notice, and you might be tempted to just contact them and get it over with. However, you don’t have to do that. You can take the time you need to make sure your records are in order, and if you postpone it, that usually works to your advantage.
Tip #2: Don’t Play the Host
It’s not always necessary for the IRS to come to your place of business to perform an audit. Go to them, if possible. At the very least, talk to your tax professional and find out what they suggest for you to do about the location.
Tip #3: Protect Your Tax Information
When the IRS schedules an audit, they’re scheduling it for a particular year. They don’t need to see your tax returns from previous years, so don’t volunteer any information that’s not for audit year.
Tip #4: Know the Appeal Process
It’s best if you assume that you will probably end up owing something once the audit is complete, but that doesn’t mean you have to accept the final outcome. You can appeal the result of your audit, which might mean more conversations with the auditor or his or her manager. If you don’t reach a solution, you can appeal to the IRS or even go to tax court.
Tip #5: Know the Law
The law states that the IRS has three years after you file your tax return to audit you for any particular year. If you receive a notice for an audit and it’s been more than three years, you do not have to comply with their requests.
The best way to survive an IRS property management tax audit is to make sure you’re keeping excellent records on all of your accounts. We can help you with that, and our property management software can easily be tailored to meet the needs of your business. Contact us at PropertyBoss for more information.
