Lizzie Weakley
Lizzie Weakley has written 79 articles for SB Informer.
View all articles by Lizzie Weakley...

Under Audit? 5 Ways Your Company Needs to Approach Being Audited

Lizzie Weakley

July 31, 2018

Not rated

If your business has been audited by a state or federal tax agency, it is important to take the matter seriously. Ideally, you will hire an accountant and an attorney to assist with gathering information related to the audit. What are some other steps that your business should take to increase the odds of a favorable outcome?


Take Your Time

It isn’t a crime to ask for more time to gather information. In fact, the state or federal agency that audited your business expects that some data may be hard to obtain in a timely manner. As long as the company is taking good faith measures to cooperate with the audit, the government will provide as much leeway as possible.


Only Provide What Was Asked For

The worst thing that you can do is speak about information that is currently outside the scope of the audit. Doing so could turn a narrow investigation into a broader one, which could lead to additional penalties. At a minimum, an expanded investigation will cost more time and money in legal and other fees.


Create a Plausible Narrative Based on Facts and Precedent

Just because your company has been accused of not paying its fair share of income, payroll or other types of taxes does not mean it is guilty. Your accounting services professional and legal counsel can use corporate records and previous tax cases to create a defense to the audit.


Be As Accommodating As Possible

It is never a good idea to obfuscate or try to obstruct a government investigation into your company. If you have been asked to provide documents, you should provide them as soon as possible. If you have been asked to schedule an interview, do so as soon as possible. By having an open and honest attitude when talking with authorities, it makes it easier to wrap up their investigation in a timely manner.


Employees Should Refer Requests for Comment to Counsel

Employees should be instructed to refer any requests for comment to the company’s legal counsel. This is true whether the media or the government asks for information. Once an attorney has reviewed the request, the employee can then be told whether or not to provide details on the ongoing audit.


If your company is under audit, the best thing to do is not panic. Instead, read the audit notice carefully, construct your legal team and do your best to cooperate with authorities. Taking these steps may limit any damage done by the inquiry.


Add comment Add comment (Comments: 0)  



Related Resources

Other Resources