How should you prepare for a tax audit?

A tax audit is an inevitable part of running any business, and it very often has unpleasant consequences for business owners. In many cases, the taxpayer is aware of the audit in advance and can therefore prepare for it. However, tax officials may not give prior notice of their visit or may send a notification letter within ten days.

Can you prepare for the tax authorities’ visit?

Tax audits can be scheduled or unscheduled. The latter are most often initiated due to late submission of tax returns, the provision of incorrect data, or delays in or failure to respond to various enquiries regarding violations. In this case, the tax authorities arrive without warning.

Recommendations for preparing for a tax audit:

• Get your documentation in order. A simple tip regarding the sorting out of problematic documents, as well as those not related to the company’s accounts.
• Draw up instructions. Every employee should know what to do during a tax audit. There cannot be a single set of instructions; it is better to prepare separate ones for security staff, accountants, the secretary, etc.
• Conduct an audit. Call in certified auditors who can check the financial statements and accounts. This will save you a significant amount of time, stress and money during the audit.
• Use licensed software. Company computers must be free of pirated software and hacked programmes. Employees should be warned of this in advance.
• Comply with the law. Any suspicious transactions within the company may come under close scrutiny by the tax authorities. In this case, you should expect an unannounced audit. There is no guarantee that it will go well.

Any tax audit is stressful for a company director. If you want the audit to go your way, enlist the support of experienced specialists! Contact Svarog for help!