How a Small Business Can Avoid Being Audited

Posted by Nellie Akalp under Legal
From http://blog.corpnet.com 2806 days ago

When it comes to audits, there is one important thing to keep in mind: the selection process is mostly done by a massive computer, which crunches huge amounts of data to find missing income and inconsistencies. All this is put into something called a DIFF (Discriminate Income Function) score. The higher it is, the higher is the chances the IRS will pick you.

No doubt, an audit is often a stressful experience as well as time-consuming and expensive (yes, the kinds of things that can be poisonous for a business). And if you lose to the IRS, the outcome could be devastating.

So what are some of the ways to help avoid the prospects of an audit? Well, there is nothing you can do that is full-proof (hey, we are dealing with the IRS here!) But there are some strategies that should help out: