Good Records are your best Protection
The Los Angeles tax attorneys of Golbert & Associates suggest that keeping good financial records is your best protection in avoiding a potential tax dispute or IRS tax audit. Keeping good tax records is not only a positive way to account for your firm’s financial well-being, it is also the best way to protect yourself from an audit.
Keeping good financial records can provide beneficial protection from audits when filing tax returns. In some instances, taxes are inadvertently underpaid because good records are not kept. When taxes are underpaid, the IRS will question the amounts and add strict penalties to the debt. Keeping track of transactions made during the year will also make filing taxes easier. If accurate records are kept throughout the entire fiscal year, when it comes time to file your taxes the amounts owed will be known and paid. In order to ensure protection from audit in Los Angeles, it is recommended to keep all tax records for three years after filing. Records relating to matters such as large purchases and stock transactions should be kept longer than three years to ensure protection if audited.
It is a good idea to keep up-to-date and accurate tax records for protection against potential audits. When an individual or a firm is being audited, the IRS will question particular purchases and monetary transfers. If receipts and records are kept, the questions can be quickly and accurately answered, resulting in an easier and quicker resolution. Tax records are proof that the correct amount of taxes was paid, and up-to-date tax records can prove payments were correct and on-time.
Keeping good tax records can provide much needed protection against IRS audits and can greatly aid the tax filing process. At Golbert & Associates, we are dedicated to our clients by providing valuable advice in regard to avoiding and handling tax disputes and audits. For more information about how good record keeping can protect you, contact our tax protection law firm today.
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