Article by Phil Karter and Kevin Sweeney on “Are Your Clients Prepared for a Wave of IRS Audits?”
In the Winter Issue of Pennsylvania CPA Journal, Shareholders Phil Karter and Kevin Sweeney discuss changes to the nation’s tax system which in turn will be a well-funded IRS. Having a well-funded IRS means an increase in IRS audits. Karter and Sweeney advise businesses and high-income individuals get their houses in order ahead of a potential wave of aggressive IRS review of tax returns and the consequent audits.
“The Congressional Budget Office projects that a fully funded IRS will collect an additional $200 billion in taxes over the same period,” explain Karter and Sweeney. “These changes would kick in right away, as the IRS would receive an additional $13.2 billion in funding in the next budget, which is about a 10% increase.”
They further outline that now is a good time for businesses to review their practices and put a plan in place that maximizes their chances (and those of their owners) of emerging unscathed from a tax audit. Karter and Sweeney also note that the best defense is recordkeeping. While policies for documentation retention vary from business to business it is important to have a policy in place to ensures everyone through the business adheres to it.
“A company that has followed best practices in retaining and organizing its records and has thought ahead about how it would respond to an audit inquiry will place itself in the best position to offer a robust audit defense or negotiate a favorable outcome,” said Karter and Sweeny.
To read the full article, you may click here.