One of the most frightening things that can happen to any small business is the notice of an impending audit. When the Internal Revenue Service contacts a small business owner and notifies them that they will be conducting an audit, it strikes fear into the heart of that business owner. The IRS has a reputation for being a very powerful and serious organization. So if you are a small business owner and you have been told that you will be visited by an agent from the IRS who is going to audit your books, then you're likely panicking. However, it is not beneficial to panic. Instead what you need to do is set out and be proactive about planning for that audit. Here are some things you can do as a small business owner to make sure you come out without owing any money or facing any fines. 

Find Copies And Statements Of All Receipts And Bank Transactions

Hopefully, you are the type who keeps all of your records on hand and don't have to look for much, but even if you never kept receipts, you need to do your best to produce some paper trail. So, collect any receipts you have from business expenses and also print out and collate all banking records. This is all evidence that will be used once you hand your information over to your accountant. So, make sure that any purchases are documented in a spreadsheet and that you can tie it to a corresponding credit card purchase. Next, all of your monetary transactions (online P2P payment systems, as well as bank ACH transfers) should be printed out and put into a file. Then, you can send all of this to your accountant. 

Hire An Accountant To Get Your Affairs In Order

You never want to try and handle the mess of cataloging and analyzing financial info yourself. Once you've collected the data, you should hand it over to an accountant. So, make sure that you head to a tax service and seek out an accountant that can take all of the information that you've collected and then use that to prepare the documents that you will use in your audit. 

Contact A Tax Service And Retain An Enrolled Agent

Finally, once your first accountant has prepared the document, it is time to get ready for the actual audit. For this special event, you should hire an enrolled agent to represent you. Essentially, an enrolled agent is someone who has special skills and knowledge that allows them to represent you in front of the IRS. In some cases, these were people who used to work at the Internal Revenue Service as agents and have retired and are not acting as enrolled agents in the private sector. Other times, these people are simply those who are accountants who have taken a test and passed an exam which allows them to have special knowledge and skills regarding IRS code. Either way, it's important that you hire one of these agents to represent you.

For more information, reach out to a company such as Jacksonville Tax Advisor.