A step-by-step guide to help you if your small business gets audited:
- Your small business will get a letter from the IRS or state tax department informing you that your records are being “examined.”
- Call your accountant and have them draw up a special “power of attorney” form to be filled with the IRS or state conducting the audit.
- Your accountant will work with the agent to determine the documents to be provided, and to limit the scope of the examination.
- Gather all the requested documents for your business including W-2s, 1099s, invoices, bills, bank statements, and other records of your company income and expenses.
- Send the documents to your accountant who will compile a binder of all the information and provide a space for the auditor if needed.
- Your accountant will help to answer questions. If the auditor requests an “on-site” visit to your business, your accountant will schedule the meeting with you and come along to ensure that the auditor does not delve into areas outside the scope of the examination.
- The examination report will be sent to you and your accountant by the agent with any proposed changes to income or taxes, along with instructions on how to appeal, You will usually have at least 30 days to decide whether to accept the report’s finding or appeal.
- You survived your audit.
If you have any questions regarding any of the steps or about your small business, please contact us at firstname.lastname@example.org or 703-591-5200.
In order for small businesses to be successful and sustainable, it is crucial to start making sure that you have accounting responsibilities taken care of in advance. This includes legal and financing activities, planning, and many housekeeping tasks, from registering business to bookkeeping to projecting cash-flow and to paying taxes. While you may not need to have an accounting degree to accomplish these tasks, the more you understand about these vital financial components to small business operation, the greater your business will succeed.
BSB receives many inquiries throughout the year from small-business owners and have compiled a checklist to address some of the most common questions that we receive from clients. These checklists are composed of the main accounting requirements a new small business owner needs to complete before their business can launch. To learn more about any of these items on the checklist, please consult your accountant.
REQUIRED – ALL BUSINESSES
- Research business name options and check trademark issues.
- Determine business entity type.
- Decide on calendar year vs. fiscal year reporting.
- Work with an attorney to produce organizational documents.
- Register business entity with state corporation commission.
- Apply for Federal tax ID#.
- Register for a business license (DC, MD, VA by county).
- Open business bank account with local bank.
- Discuss with your banker potential line-of-credit options.
- Establish accounting system – online or desktop.
- Get business insurance (D&O, liability, property)
- Review personal and employee insurance options (disability, health, life).
REQUIRED – IF YOU HAVE EMPLOYEES
- Register account with state tax authority for withholding and unemployment taxes.
- Get employment forms for all employees – W-9, I-9, other.
- Set up employment files separate from other documents.
- Sign up for online tax payment account with IRS and state(s).
AFTER OPERATIONS BEGIN
- Get W-9 form from all vendors, before payment.
- Register business entity with other states in which you are doing business; obtain license if required.
- Register for sales tax account.
Download a printable copy HERE
“I have had the pleasure of working with Burdette Smith & Bish over the last two years. The individualized attention I have received has been nothing short of exceptional. They have identified multiple tax-savings strategies our previous CPAs did not uncover. Also, the time and effort they put into my return gives me the peace of mind I need to focus on my business rather than my taxes. All of the plaudits and recognition they receive is certainly well-deserved. They truly are ‘not your average CPA Firm.’ “Partner, Web Retailer
“As a small business owner, taxes can be confusing and overwhelming. I am so glad I was referred to Burdette Smith & Bish, LLC. They have been lifesavers, answering all of my many questions in layman’s terms, treating me alike a person, and not just another client. They understand my struggles as a business owner and encourage me at every chance. I highly recommend BSB and I am grateful for their services.”Owner, Child Care Center
I came to BSB initially for corporate tax help. That was 10 years ago. I am using BSB more now than ever. As my company evolved, BSB was able to grow right along side of it. Tom Crutchfield at BSB, has been very knowledgable and great resource for Consequent Solutions for tax, accounting, and auditing related services.Government Contractor
As an owner of a rapidly growing small business, we needed an experienced bookkeeping & business advisory partner to keep up with all of the changes my organization was going through. We found that partner in Burdette, Smith & Bish. They are an integrated part of our team and an invaluable resource for us as we go through our growth phase.Michael Delpierre Conversion Pipeline