A business receives an audit notice from the IRS or other authorities; then, at that time, it can be troubling for the company to find the warning signs and fix those issues. A company must always remain steadfast to protect its interests and take proactive measures.
In this blog, we will understand what the audit red flags are and how, by consulting with an IRS audit lawyer, one can navigate through the red flags and protect the business interest.
- Unusual Fluctuations in Financial Data: Manage Your Numbers
It’s important for a business to keep its books checked so that during the time of any audit, one cannot question the numbers. A business needs to explain and have proper proof to justify the number of fluctuations in its P&L and balance sheet.
A company, with the help of an audit lawyer, needs to find the probable reasons for such fluctuations and take preventive measures so that they can fix these issues and keep the financial records clean.
It’s important because, in certain instances, the tax authorities find it uncomfortable that there is so much fluctuation with the fund and hence look for more clues. The case gets complicated, which in turn can hamper the business.
- Employee Whistleblower Allegations: Addressing Internal Concerns
The impact of a whistleblower is huge in the audit process. Therefore, it’s mandatory to get your files checked thoroughly with an internal audit team. A company needs to manage the issues with the whistleblower and must listen to the person so that they can address the concerns internally rather than taking them out in public.
Any big internal mistake can cause trouble for the company in terms of its public relations. Hence, it’s important to address those claims, and the management must prepare a strategic response that is necessary to prevent these damages. One can take the help of Los Angeles, California, tax attorneys or attorneys from other locations who can deal with the whistleblower and devise strategic output.
- Complex Transactions and Unusual Business Structures
The challenges of complex transactions are one of the probable reasons that raise red flags among the tax authorities. A company that engages in gathering and sending funds across the border through complex transaction processes is one of the reasons why a business can get an audit notice from the IRS.
It is the expertise of the criminal lawyers who have expertise in accounting that can fight the case on behalf of the company if it faces any such charges.
- Past Legal Issues: Lingering Shadows in the Audit Process
Unsettled past legal issues are one of the main reasons that can further deepen the trouble of the company. It is a red flag for the company when it finds that its current financial state is being affected by past trials.
Here, the company must keep the new files clear from the past files so that the new ones can keep a separate record that will actually make the current metric. One can hire the best tax lawyers who are proficient in following these charges and can safeguard the interests of the companies.
