For many residents in California, the fear of a Board of Equalization (BOE) audit can loom large. Without the help of a CPA next to you, as well, you can find that the whole issue of an audit can become quite frightening.
The first thing that you should do, then, is rectify your lack of financial assistance. You should always have someone who understands taxation and audits working alongside you, helping you to minimize mistakes and misunderstandings. However, it’s not as simple as just hiring an accountant and then taking no further part.
If you are dealing with a BOE audit then you have to be involved from the earliest stages possible. If there is any slight confusion about the validity of information that you have provided, then you are in line for a potential audit in the future. As stressful as that may be when it happens, it’s an unavoidable situation and one that you should look to try and rectify as quickly as you can.
The reason for an audit could be anything from incorrect application of tax to sales and personal property usage right through to using the wrong tax when reporting sales. It can be for a wide range of reasons, which is why having professional help with you when it all starts is so useful. A good CPA can look at your audit and see where the likely questions are coming from. Then, you can both work together to make an amicable solution.
What Should I Prepare?
For any meetings regarding your audit, you should be working on creating;
- Detailed reasons why mistakes were made.
- Extensive reasoning for any mistakes and why they were not rectified earlier
- Records to prove that you have made a mistake and aren’t trying to doctor taxes.
- A clear and detailed message to try and reconcile with the BOE after the event has occurred.
By taking the time to prepare all of the above you can make it much more likely to reach a healthy solution from your audit. You will usually need to provide the BOE with your accounts, income statements, ledgers, balance sheets, invoices, purchase orders, contracts, statements and any other business listing.
It’s absolutely vital that you are clear and honest from the start with the authorities. They typically don’t enjoy running around and chasing clients, so the quicker you can give the BOE a reason to move on, the better.
You will likely have to deal with a long and arduous process, once an audit is initiated. This can be a trying issue and one that will test your mettle and your patience quite heavily. To avoid these problems from spiraling, though, you should look to bring in the kind of assistance from an accountant that you may need.
This will make it much easier to reach a solution that makes sense for everyone. Not only can you begin to prepare a simple and effective plan to combat the audit, you can fight the audit with success.
If you are currently under audit in San Diego County, contact a Tax Professional.
