Put your audit in reverse to save sales and use tax

It’s a safe bet that state tax authorities will let you know if you haven’t paid enough sales and use taxes, but what are the odds that you’ll be notified if you’ve paid too much? The chances are slim — so slim that many businesses use reverse audits to find overpayments so they can seek refunds. Take all of your exemptions In most states, businesses are exempt from sales tax on equipment used Continue Reading

Is the IRS Targeting Partnerships?

IRS audits of partnerships were up 18.6% in 2015 over the previous tax year, according to the agency's Fiscal Year 2015 Enforcement and Service Results. That's the highest audit rate partnerships have experienced since 2006. By comparison, audits of large C corporations decreased by 8.8% in 2015. The situation is expected to only get worse under the new rules for audits of partnerships that Continue Reading

Businesses: How to Help Prepare for Audit Season

The busiest time of year for external financial statement auditors generally runs from January to April each year. But CPAs usually start gearing up for audit season in November of the preceding year. Accountants meet with clients, assign staff and schedule fieldwork. Then, the team conducts preliminary financial analytics, observes physical inventory counts, assesses risk factors and customizes Continue Reading

Is Your 401(k) Plan Up to Snuff? Watch Out for These Audit Red Flags

Four emerging potential 401(k) trouble spots are becoming a greater focus at the Department of Labor (DOL). One involves self-directed brokerage accounts, or "brokerage windows," that allow participants to purchase individual securities. The DOL worries that participants with limited investing experience will jump on the hottest stock or market sector at its high-water mark, watch it tank, then Continue Reading

Who Are the Latest IRS Targets? A List of 22 Audit Triggers

What triggers an IRS tax audit? While the IRS isn't about to publish a list, there are a number of items that are known to raise the IRS's interest in a return. What are your chances of being audited? For individuals, it depends on your income. In fiscal year 2013, returns reporting income of under $200,000 stood a 0.88 percent chance of an audit. Those with incomes of $200,000 and more had a Continue Reading