If your business has ever found itself involved in an audit by the Internal Revenue Service (IRS) you know that this is a painful process. The time and expense alone can be devastating. Knowing in advance what can trigger an audit and what auditors are looking for if you do get audited can help you structure your systems to clearly demonstrate the validity of your business practices.
There is a wealth of tax audit information available but one resource we have found extremely helpful is the Small Business Notes website. This site provides various Audit Techniques Guides based on the industry you are in. These guides contain audit examination techniques, common and unique industry issues, business practices, industry terminology and other information to assist examiners in performing examinations.
Be aware that the audit guides are written so that auditors know what practices to look for in auditing a business. However, the guides are available to any business owner and are a gold mine of information to help you operate your business from a tax standpoint to keep the auditors away from your door. The guides are relatively technical since they are written for auditors. Sharing the information with your accountant may be wise to obtain clarification on some of the issues they raise.